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 October 2, 1999

                                       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 October 2, 1999

<PAGE>


                     Cluett American Corp. and Subsidiaries
                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

                                                                            Page
Item 1.  Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of October 2, 1999
and December 31, 1998                                                        F-1

Condensed Consolidated Statements of Operations for the
thirteen and thirty-nine
week periods ended October 2, 1999 and September 26, 1998                    F-2

Condensed Consolidated  Statements of Cash Flows for the
thirty-nine weeks ended October 2, 1999 and September 26, 1998               F-3

Notes to Condensed Consolidated Financial Statements - October 2, 1999       F-4


Item 2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations.                                                     1


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.           7





                           PART II - OTHER INFORMATION



Item 1.   Legal Proceedings                                                    8

Item 4.   Submission of Matters to a Vote of Security Holders                  8

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


SIGNATURES                                                                    12

<PAGE>
<TABLE>


                     Cluett American Corp. and Subsidiaries
                     Condensed Consolidated Balance Sheets
                 (Dollars In Thousands, except per share data)


                                                                                October 2,    December 31,
                                                                                   1999           1998
                                                                               -----------------------------
                                                                               (Unaudited)    (Note 1)
<S>                                                                           <C>            <C>
                                   Assets
Current assets:
   Cash and cash equivalents..........................................        $     7,062     $  2,868
   Accounts receivable, net...........................................             51,368       46,786
   Inventories .......................................................             89,197       74,599
   Prepaid expenses and other current assets..........................              3,734        3,972
                                                                              ----------------------------
Total current assets..................................................            151,361      128,225
Property, plant and equipment, net....................................             47,596       48,124
Pension assets........................................................
                                                                                   32,883       31,383
Deferred financing fees...............................................             10,559       11,198
Goodwill..............................................................              4,692            -
Other noncurrent assets...............................................              2,006        1,845
                                                                              ============================
Total assets..........................................................           $249,097     $220,775
                                                                              ============================

                  Liabilities and stockholder's deficit Current liabilities:
   Accounts payable and accrued expenses..............................           $ 35,430    $  40,107
   Accrued interest payable...........................................              6,321        2,332
   Short-term debt and current portion of long-term debt..............             18,359       10,248
   Income taxes payable...............................................              1,827        1,475
                                                                              ----------------------------
Total current liabilities.............................................             61,937       54,162

Due to parent.........................................................             28,771       27,974
Long-term debt and capital lease obligations..........................            266,457      235,681
Dividends payable.....................................................              2,403          605
Other non-current liabilities.........................................                130          111
Senior exchangeable preferred stock, cumulative, $.01 par value:
   authorized 4,950,000, issued and outstanding 563,901 shares
   (liquidation preference of $56,390)................................            54,724        51,288
Stockholder's deficit:
   Common stock, $1 par value: authorized, issued and outstanding 1,000
      shares..........................................................                  1            1
   Additional paid-in capital.........................................            111,683      116,919
   Accumulated deficit................................................           (276,567)    (264,933)
   Other comprehensive loss...........................................               (442)      (1,033)
                                                                              ----------------------------
Total stockholder's deficit...........................................           (165,325)    (149,046)
                                                                              ============================
Total liabilities and stockholder's deficit...........................          $ 249,097    $ 220,775
                                                                              ============================


                             See accompanying notes.


                                      F-1
</TABLE>
<PAGE>
<TABLE>

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


                                                             Thirteen weeks ended               Thirty-nine weeks ended
                                                         October 2,      September 26,        October 2,    September 26,
                                                            1999             1998                1999            1998
                                                       ---------------- ----------------     ------------- -----------------
<S>                                                    <C>               <C>                   <C>           <C>
Net sales..........................................            $87,438          $93,264          $247,756          $261,898
Cost of goods sold.................................             64,946           66,257           179,043           182,695
                                                       ---------------- ----------------     ------------- -----------------
Gross profit.......................................             22,492           27,007            68,713            79,203

Selling, general and administrative expenses.......             18,979           21,129            57,845            59,958
Facility closing and reengineering costs...........              1,483            -                 2,258             1,022
                                                       ---------------- ----------------     ------------- -----------------
Operating income...................................              2,030            5,878             8,610            18,223
Interest expense, net..............................              6,726            6,281            19,408            13,544
Other expense, net.................................                 50                -                79                 -
                                                       ---------------- ----------------     ------------- -----------------
Income (loss) before reorganization costs and
   income taxes....................................            (4,746)            (403)          (10,877)             4,679
Bankruptcy reorganization costs....................              -                -                    -             13,179
                                                       ---------------- ----------------     ------------- -----------------
Loss before provision for income taxes.............            (4,746)            (403)          (10,877)           (8,500)
Provision for income taxes.........................                193              312               751               899
                                                       ---------------- ----------------     ------------- -----------------
Net loss ..........................................           $(4,939)           $(715)         $(11,628)          $(9,399)
                                                       ================ ================     ============= =================






                             See accompanying notes.


                                      F-2
</TABLE>
<PAGE>
<TABLE>

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


                                                                               Thirty-nine weeks ended
                                                                              October 2,   September 26,
                                                                                 1999           1998
                                                                            ------------------------------
<S>                                                                          <C>            <C>
Operating activities
Net loss...........................................................            $(11,628)      $(9,399)
Adjustment to reconcile net loss  to net cash and cash equivalents
   used in operating activities:
   Depreciation....................................................               7,225         6,295
   Amortization....................................................               1,235           585
   Loss (Gain)  on disposal of property, plant & equipment.........                 (57)            -
   Write-down of property, plant & equipment.......................                 360             -
   Changes of liabilities subject to compromise-reorganization.....                   -       (22,442)

Changes in operating  assets and  liabilities,  net of effects from  purchase of
   CAT:
   Accounts receivable.............................................              (4,229)       (6,382)
   Inventories.....................................................             (13,932)      (14,661)
   Prepaid expenses and other current assets.......................                 282       (12,099)
   Pension and other noncurrent assets.............................              (1,751)         (561)
   Accounts payable and accrued expenses...........................              (1,762)          727
   Income taxes payable............................................                 352          (557)
   Other liabilities...............................................                 744         3,797
   Effect of changes in foreign currency...........................                 763             -
                                                                            ----------------------------
Net cash and cash equivalents used in operating activities.........             (22,398)      (54,697)

Investing activities
Purchase of fixed assets...........................................              (8,168)       (7,640)
Purchase of CAT, net of cash acquired..............................              (4,954)            -
Proceeds on disposal of fixed assets...............................               1,115            77
                                                                            ----------------------------
Net cash and cash equivalents used in investing activities.........             (12,007)       (7,563)

Financing activities
Issuance of preferred stock........................................                   -        48,125
Distribution to parent.............................................                   -       (87,522)
Principal payments on pre-petition credit facility.................                   -      (146,490)
Proceeds from long term debt.......................................                   -       226,000
Principal payments on long term debt ..............................              (2,634)       (4,000)
Net borrowings under line-of-credit agreement .....................              38,352        20,213
Net proceeds from long term note (CAT).............................               2,881             -
Principal payments on capital leases...............................                 (11)       (2,396)
                                                                            ----------------------------
Net cash and cash equivalents provided by financing activities.....              38,588        53,930

Effect of exchange rate changes on cash............................                  11           (36)
                                                                            ----------------------------
Net change in cash and cash equivalents............................               4,194        (8,366)
Cash and cash equivalents at beginning of period...................               2,868        10,019
                                                                            ============================
Cash and cash equivalents at end of period.........................         $       7,062      $1,653
                                                                            ============================


                             See accompanying notes.

                                      F-3
</TABLE>
<PAGE>


        Notes to Condensed Consolidated Financial Statements (Unaudited)
                                 October 2, 1999

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 generally accepted  accounting  principles 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 generally  accepted  accounting  principles  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 and thirty-nine week periods ended
October 2, 1999 are not necessarily indicative of the operating results that may
be expected for the year ending December 31, 1999.

The  Balance  Sheet at  December  31,  1998 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles 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,  1998,  filed  with the  Securities  and  Exchange
Commission on March 29, 1999.

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
October 2, 1999 and September 26, 1998, respectively.

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


2. Acquisition

On July 13, 1999, the Company  acquired 100% of the outstanding  common stock of
Central American Tailoring ("CAT"), incorporated under the laws of Honduras, for
$5.0  million  including  related  acquisition  costs.  CAT had  been a  captive
contractor  providing sewing services.  The purchase price was comprised of cash
of $1.6 million, the issuance of a $2.9 million long-term note and other related
acquisition costs of $0.5 million. The cash payment was financed primarily under
the Company's  revolving  credit  agreement.  The  acquisition was accounted for
using the purchase method of accounting. Accordingly, the assets and liabilities
of the acquired  business are included in the  consolidated  balance sheet as of
October  2,  1999.  The  operating  results  of CAT have  been  included  in the
consolidated  statements of operations from the date of acquisition.  The excess
purchase  price  over the fair  market  value of the  underlying  assets of $4.7
million was allocated to goodwill.

                                      F-4

<PAGE>


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

3. Inventories

         Inventories consist of the following at the specified date:
<TABLE>

                                                                December 31,         October 2,
                                                                    1999                1998
                                                             ------------------ -----------------
                                                                   (Dollars In Thousands)

<S>                                                            <C>                   <C>
Finished goods                                                     $66,702            $60,134
Work in process                                                      9,610              4,189
Raw materials and supplies                                          12,885             10,276
                                                             ================== =================
                                                                   $89,197            $74,599
                                                             ================== =================

</TABLE>


4. Comprehensive Income

For the periods ending October 2, 1999 and September 26, 1998, accumulated other
comprehensive loss as shown in the consolidated  balance sheets was comprised of
foreign  currency  translation  adjustments,  which  prior to the  adoption  was
reported  separately in stockholder's  deficit.  The components of comprehensive
loss, for these periods were as follows:

<TABLE>
                                                             Thirteen weeks ended               Thirty-nine weeks ended
                                                          October 2,     September 26,        October 2,    September 26,
                                                             1999            1998                1999            1998
                                                        --------------- ----------------     ------------- -----------------
                                                                              (Dollars In Thousands)
<S>                                                       <C>               <C>              <C>              <C>
Net loss...........................................         $(4,939)         $(715)           $(11,628)       $ (9,399)
Foreign currency translation adjustment............              992          (352)                  591         1,633
                                                        ================ ===============     ============= =================
Comprehensive loss.................................        $(3,947)         $(1,067)          $(11,037)         $(7,766)
                                                        ================ ===============     ============= =================


</TABLE>






                                      F-5
<PAGE>


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

5. Segment Data

The Company  identifies its reportable  segments based on the segment's  product
offerings.  For the quarter  ended  October 2, 1999,  the Company  conducted its
business  through two  principal  segments:  the Sock Group and the Shirt Group.
During the fiscal year ended December 31, 1998,  management  decided to exit the
Burberrys  and the Yves Saint  Laurent  ("YSL")  businesses.  Consequently,  the
Company   terminated  the  Burberrys  and  YSL  license  agreements  and  ceased
distributing  products  under these brands as of June 30,  1999.  Because of the
termination of these license  agreements,  the financial results of these brands
have been  restated  and reported  under the All Other  segment.  For  financial
reporting  purposes,  the dress shirt business under the Kenneth Cole trademark,
which was launched in Fall 1998  (previously  reported under the Designer Group)
was  consolidated  into the Shirt Group financial  results and the sock business
under the Kenneth Cole trademark was consolidated  into the Sock Group financial
results. During the second quarter, the Company restated both the Sock Group and
Shirt Group prior year's financial  results for the addition of the Kenneth Cole
brand.
<TABLE>
                                                                Thirteen weeks ended              Thirty-nine weeks ended
                                                           October 2,         September 26,    October 2,      September 26,
                                                              1999               1998            1999             1998
                                                        ----------------- --- ------------    ------------ -- -------------
                                                                              (Dollars in Thousands)
<S>
Net Sales                            <C>                         <C>            <C>             <C>               <C>
                                      Sock                       $42,776           $41,988       $115,685         $113,534
                                      Shirt                       46,204            46,346        131,397          132,095
                                      All Other                      803             7,689          6,409           22,195
                                      Intersegment               (2,345)           (2,759)        (5,735)          (5,926)
                                                                 -------           -------        -------          -------
                                                                 $87,438           $93,264       $247,756         $261,898
                                                                 =======           =======       ========         ========
Operating Income (loss) excluding
facility closing and reengineering
costs
                                      Sock                         7,964             7,198         19,401           16,571
                                      Shirt                      (3,520)             2,895        (6,070)            8,338
                                      All Other                    (931)           (4,215)        (2,463)          (5,664)
                                                                   -----           -------        -------          -------
                                                                   3,513             5,878         10,868           19,245
                                                                   =====             =====         ======           ======

Depreciation
                                      Sock                         1,511             1,335          4,531            4,005
                                      Shirt                          832               757          2,694            2,278
                                      All Other                      ---                12          ---                 12
                                                                     ---                --          -----               --
                                                                   2,343             2,104          7,225            6,295
                                                                   =====             =====          =====            =====
Amortization
                                      Sock                           ---               ---            ---              ---
                                      Shirt                           49                22             59               22
                                      All Other                      395               563          1,176              563
                                                                     ---               ---          -----              ---
                                                                     444               585          1,235              585
                                                                     ===               ===          =====              ===
Identifiable Assets
                                      Sock                        88,561            86,456         88,561           86,456
                                      Shirt                      107,086           107,900        107,086          107,900
                                      All Other                      275            11,155            275           11,155
                                                                     ---            ------            ---           ------
                                                                $195,922          $205,511       $195,922         $205,511
                                                                ========          ========       ========         ========
EBITDA (a)
                                      Sock                         9,475             8,533         23,932           20,576
                                      Shirt                      (2,688)             3,674        (3,366)           10,638
                                      All Other                    (931)           (4,203)        (2,463)           (5,652)
                                                                   -----           -------        -------          -------
                                                                   5,856             8,004        18,103            25,562
                                                                   =====             =====        ======            ======
</TABLE>
                                      F-6
<PAGE>
Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

5. Segment Data (Continued)

(a) EBITDA does not include intangible amortization of $1,225 which accrue below
the line and asa thus is not included in the EBITA calculation.

Reconciliation of Reportable Segments Net Sales, Operating Income
and Identifiable Assets
<TABLE>
                                                                  Thirteen weeks ended               Thirty-nine weeks ended
                                                           October 2,       September 26,         October 2,       September 26,
                                                              1999               1998                1999              1998
                                                          -------------- -- ---------------      ------------- -- ----------------

                                                                                  (Dollars In Thousands)
<S>                                                          <C>                <C>               <C>                  <C>
   Net Sales
       Total net sales for reportable  segments                 $88,980         $88,334            $247,082             $245,629
       Other net sales                                              803           7,689               6,409               22,195
       Elimination of intersegment net sales                    (2,345)          (2,759)             (5,735)              (5,926)
                                                                -------          -------            -------              -------

             Total consolidated net sales                        87,438          93,264             247,756              261,898
                                                                 ======          ======             =======              =======


   Operating Profit (Loss)
       Total    operating    profit    or    loss    for
   reportable               segments                              4,444                 10,093        13,331               24,909
       Other operating profit or loss                             (614)                (3,461)         (613)              (4,886)
       Unallocated amounts:
          Corporate expense                                       (817)                (1,252)       (3,353)              (2,272)
          Facility closing and reengineering costs              (1,483)                     --       (2,258)              (1,022)
       Adjustment to pension expense in consolidation               500                    498         1,503                1,494
                                                                    ---                    ---         -----                -----

             Total operating profit                               2,030                  5,878         8,610               18,223
                                                                  =====                  =====         =====               ======


   Assets
       Total assets for reportable segments                     195,647                194,356       195,647              194,356
       All other assets                                             275                 11,155           275               11,155
       Unallocated amounts:
          Deferred finance costs                                 10,507                 11,554        10,507               11,554
          Pension assets                                         32,883                 31,722        32,883               31,722
          Other unallocated amounts                               9,785                (4,732)         9,785              (4,732)
                                                                  -----                -------         -----              -------

                Consolidated total                             $249,097               $244,055      $249,097             $244,055
                                                               ========               ========      ========             ========
</TABLE>

                                   F-7




<PAGE>


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


6. 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  principal  domestic  subsidiaries:  Cluett
Peabody & Co., Inc., Great American Knitting Mills,  Inc., 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 Senior Credit Facility and the Notes are not guaranteed by
the foreign  operating  subsidiaries  Cluett,  Peabody  Canada Inc. and Arrow de
Mexico  S.A.  de  C.V.  (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.



                                      F-8
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                 OCTOBER 2, 1999
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                              PARENT        GUARANTOR       NON-GUARANTOR
                                            COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                      <C>           <C>                <C>                <C>               <C>
Assets
Current assets:
   Cash and cash equivalents......        $     --      $     6,867       $         195       $         --      $       7,062
   Accounts receivable, net.......              --           44,242               7,126                 --             51,368
   Inventories (Note 2)...........              --           75,397              13,800                 --             89,197
   Prepaid expenses and other
      current assets..............              --            3,225                 509                 --              3,734
                                                --            -----                 ---                 --              -----
Total current assets..............              --          129,731              21,630                 --            151,361
Investment in subsidiaries........        (97,958)               --                  --             97,958                 --
Intercompany receivable (payable)           15,000         (15,000)                  --                 --                 --
Property, plant and equipment, net              --           45,613               1,983                 --             47,596
Pension assets....................              --           32,883                  --                 --             32,883
Deferred financing fees...........              --           10,559                  --                 --             10,559
Goodwill..........................              --            4,692                  --                 --              4,692
Other noncurrent assets...........              --            1,252                 754                 --              2,006
                                                --            -----                 ---                 --              -----
Total assets......................      $ (82,958)     $    209,730      $       24,367      $      97,958      $     249,097
                                          ========          =======              ======             ======            =======


Current liabilities:
   Accounts payable and accrued
      expenses....................        $     --      $    32,956      $        2,474       $         --      $      35,430
     Accrued interest payable.....              --            6,321                  --                 --              6,321
   Short-term debt and current
      portion of long-term debt...              --            9,173               9,186                 --             18,359
   Income taxes payable...........              --            1,620                 207                 --              1,827
                                                --            -----                 ---                 --              -----
Total current liabilities.........              --           50,070              11,867                 --             61,937

Due to parent.....................              --           28,771                  --                 --             28,771
Long-term debt and capital lease
   obligations....................              --          266,224                 233                 --            266,457
Dividends payable.................           2,403               --                  --                 --              2,403
Other non-current liabilities.....              --              130                  --                 --                130
Senior exchangeable preferred
   stock, cumulative, $.01 par
   value: authorized 4,950,000,
   issued and outstanding:
   563,901 shares (liquidation              54,724               --                  --                 --             54,724
   preference of $56,390).........
Stockholder's deficit.............        (140,085)        (135,465)              12,267             97,958          (165,325)
                                          ---------        ---------              ------             ------          ---------
Total liabilities and                    $ (82,958)     $    209,730      $       24,367      $      97,958      $     249,097
stockholder's deficit.............         ========          =======              ======             ======            =======


                                      F-9
</TABLE>
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 1998
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                          PARENT        GUARANTOR       NON-GUARANTOR
                                          COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                      <C>            <C>              <C>                <C>                <C>
Assets
Current assets:
   Cash and cash equivalents......        $     --      $     2,396       $         472       $         --      $       2,868
   Accounts receivable, net.......              --           42,599               4,187                 --             46,786
   Inventories (Note 2)...........              --           63,158              11,441                 --             74,599
   Prepaid expenses and other
      current assets..............              --            3,168                 804                 --              3,972
                                                --            -----                 ---                 --              -----
Total current assets..............              --          111,321              16,904                 --            128,225
Investment in subsidiaries........        (86,330)               --                  --             86,330                 --
Intercompany receivable (payable)           15,000         (15,000)                  --                 --                 --
Property, plant and equipment, net              --           46,112               2,012                 --             48,124
Pension assets....................              --           31,383                  --                 --             31,383
Deferred financing fees...........              --           11,198                  --                 --             11,198
Other noncurrent assets...........              --            1,012                 833                 --              1,845
                                                --            -----                 ---                 --              -----
Total assets......................      $ (71,330)     $    186,026      $       19,749      $      86,330      $     220,775
                                          ========          =======              ======             ======            =======

Liabilities and stockholder's deficit Current liabilities:
   Accounts payable and accrued
      expenses....................        $     --      $    35,449      $        4,658       $         --      $      40,107
     Accrued interest payable.....              --            2,332                  --                 --              2,332
   Short-term debt and current
      portion of long-term debt...              --            6,600               3,648                 --             10,248
   Income taxes payable...........              --            1,268                 207                 --              1,475
                                                --            -----                 ---                 --              -----
Total current liabilities.........              --           45,649               8,513                 --             54,162

Due to parent.....................              --           27,974                  --                 --             27,974
Long-term debt and capital lease
   obligations....................              --          235,450                 231                 --            235,681
Dividends payable.................             605               --                  --                 --                605
Other non-current liabilities.....              --              111                  --                 --                111
Senior exchangeable preferred
   stock, cumulative, $.01 par
   value: authorized 4,950,000,
   issued and outstanding:
   530,730 shares (liquidation              51,288               --                  --                 --             51,288
   preference $53,073)
Stockholder's deficit.............       (123,223)        (123,158)              11,005             86,330          (149,046)
                                         ---------        ---------              ------             ------          ---------
Total liabilities and                   $ (71,330)     $    186,026      $       19,749      $      86,330      $     220,775
stockholder's deficit.............        ========          =======              ======             ======            =======

</TABLE>
                                      F-10

<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                      THIRTEEN WEEKS ENDED OCTOBER 2, 1999
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                             PARENT        GUARANTOR       NON-GUARANTOR
                                            COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                       <C>           <C>               <C>                 <C>               <C>
Net sales.............................    $     --      $    79,669      $        7,769       $         --      $      87,438
Cost of goods sold....................          --           58,197               6,749                 --             64,946
                                                --           ------               -----                 --             ------
Gross profit..........................          --           21,472               1,020                 --             22,492

Selling, general and administrative
     expenses.........................          --           17,258               1,721                 --             18,979
                                                --
Facility closing and reengineering
     costs............................          --            1,361                 122                 --              1,483
                                                --            -----                 ---                 --              -----
Operating income......................          --            2,853               (823)                 --              2,030
Loss on investments in
     subsidiaries ....................     (4,939)               --                  --              4,939                 --
Interest expense, net.................          --            6,549                 177                 --              6,726
Other expense, net....................          --               49                   1                 --                 50
                                                --               --                   -                 --                 --
Income before reorganization costs
   and income taxes...................     (4,939)          (3,745)             (1,001)              4,939            (4,746)
Bankruptcy reorganization costs.......          --               --                  --                 --                 --
                                                --               --                  --                 --                 --
Income (loss) before provision for
   income taxes.......................     (4,939)          (3,745)             (1,001)              4,939            (4,746)
Provision for income taxes............          --              167                  26                 --                193
                                                --              ---                  --                 --                ---
Net loss..............................  $  (4,939)     $    (3,912)     $       (1,027)      $       4,939     $      (4,939)
                                           =======          =======             =======              =====            =======

</TABLE>
                                      F-11
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     THIRTEEN WEEKS ENDED SEPTEMBER 26, 1998
                             (DOLLARS IN THOUSANDS)
 <TABLE>
                                             PARENT        GUARANTOR         NON-GUARANTOR
                                             COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                       <C>           <C>              <C>                 <C>               <C>
Net sales.............................    $     --      $    86,002      $        7,262       $         --      $      93,264
Cost of goods sold....................          --           59,509               6,748                 --             66,257
                                                --           ------               -----                 --             ------
Gross profit..........................          --           26,493                 514                 --             27,007

Selling, general and administrative
     expenses.........................          --           18,775               2,354                 --             21,129
Facility closing and reengineering
     costs............................          --               --                  --                 --                 --
                                                --               --                  --                 --                 --
Operating income......................          --            7,718             (1,840)                 --              5,878
Income on investment in
     subsidiaries.....................       (715)               --                  --                715                 --
Interest expense, net.................          --            6,293                (12)                 --              6,281
                                                --            -----                ----                 --              -----
Income before reorganization costs
   and income taxes...................       (715)            1,425             (1,828)                715              (403)
Bankruptcy reorganization costs.......          --               --                  --                 --                 --
                                                --               --                  --                 --                 --
Income (loss) before provision for
   income taxes.......................       (715)            1,425             (1,828)                715              (403)
Provision for income taxes............          --              306                   6                 --                312
                                                --              ---                   -                 --                ---
Net income (loss).....................   $   (715)       $    1,119  $          (1,834)         $      715       $      (715)
                                             =====            =====             =======                ===               ===


                                      F-12
</TABLE>
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                            PARENT        GUARANTOR       NON-GUARANTOR
                                           COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                       <C>          <C>               <C>                 <C>                <C>
Net sales.............................    $     --     $    223,713      $       24,043       $         --      $     247,756
Cost of goods sold....................          --          159,763              19,280                 --            179,043
                                                --          -------              ------                 --            -------
Gross profit..........................          --           63,950               4,763                 --             68,713

Selling, general and administrative
     expenses.........................          --           52,093               5,752                 --             57,845
Facility closing and reengineering
     costs............................          --            1,583                 675                 --              2,258
                                                --            -----                 ---                 --              -----
Operating income......................          --           10,274             (1,664)                 --              8,610
Income on investment in
     Subsidiaries.....................    (11,628)               --                  --             11,628                 --
Interest expense, net.................          --           18,952                 456                 --             19,408
Other (income) expense, net...........          --               78                   1                 --                 79
                                                --               --                   -                 --                 --
Income before reorganization costs
   and income taxes...................    (11,628)          (8,756)             (2,121)             11,628           (10,877)
Bankruptcy reorganization costs.......          --               --                  --                 --                 --
                                                --               --                  --                 --                 --
Income (loss) before provision for
   income taxes.......................    (11,628)          (8,756)             (2,121)             11,628           (10,877)
Provision for income taxes............          --              679                  72                 --                751
                                                --              ---                  --                 --                ---
Net income (loss).....................  $ (11,628)     $    (9,435)  $          (2,193)      $     (11,628)    $     (11,628)
                                          ========          =======             =======            ========          ========
</TABLE>

                                      F-13

<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                   THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 1998
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                             PARENT        GUARANTOR       NON-GUARANTOR
                                            COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATIONS       CONSOLIDATED
<S>                                       <C>          <C>               <C>                  <C>               <C>
Net sales.............................    $     --     $    234,798      $       27,100       $         --      $     261,898
Cost of goods sold....................          --          162,705              19,990                 --            182,695
                                                --          -------              ------                 --            -------
Gross profit..........................          --           72,093               7,110                 --             79,203

Selling, general and administrative
     expenses.........................          --           52,825               7,133                 --             59,958
Facility closing and reengineering
     costs............................          --            1,022                  --                 --              1.022
                                                --            -----                  --                 --              -----
Operating income/ (loss)..............          --           18,246                (23)                 --             18,223
Income on investment in
     subsidiaries.....................     (9,399)               --                  --              9,399                 --
Interest expense, net.................          --           13,189                 355                 --             13,544
                                                --           ------                 ---                 --             ------
Income before reorganization costs
   and income taxes...................     (9,399)            5,057               (378)              9,399              4,679
Bankruptcy reorganization costs.......          --           13,179                  --                 --             13.179
                                                --           ------                  --                 --             ------
Income (loss) before provision for
   income taxes.......................     (9,399)          (8,122)               (378)              9,399            (8,500)
Provision for income taxes............          --              859                  40                 --                899
                                                --              ---                  --                 --                ---
Net income (loss)..................... $   (9,399)     $    (8,981)      $        (418)       $      9,399      $     (9,399)
                                           =======          =======               =====              =====            =======


                                      F-14
</TABLE>
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                              PARENT        GUARANTOR        NON-GUARANTOR
                                             COMPANY      SUBSIDIARIES        SUBSIDIARIES      ELIMINATIONS     CONSOLIDATED
<S>                                       <C>            <C>                <C>                 <C>             <C>
Operating activities
Net income (loss)......................   $ (11,628)     $    (9,435)       $      (2,193)      $    11,628     $     (11,628)
Adjustment to reconcile net income
(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)
  Write-down of assets.................           --              360                   --               --                360
  Changes in operating assets and                 --         (16,057)              (3,476)               --           (19,533)
                                                  --         --------              -------               --           --------
liabilities............................
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 revolving credit
agreements.............................           --           33,100                5,252               --             38,352
Principal payments on long term debt...           --          (2,634)                   --               --            (2,634)
Net proceeds on long-term note.........           --            2,881                   --               --              2,881
Principal payments on capital leases...           --               --                 (11)               --               (11)
                                                  --               --                 ----               --               ----
Net cash and cash equivalents provided
by financing activities................           --           33,347                5,241               --             38,588
Effect of exchange rates changes on               --               --                   11               --                 11
cash...................................           --               --                   --               --                 --

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

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

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


                                      F-15
</TABLE>
<PAGE>


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


6. Guarantor Subsidiaries (Continued)
          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                   THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 1998
                             (DOLLARS IN THOUSANDS)
<TABLE>
                                              PARENT        GUARANTOR        NON-GUARANTOR
                                             COMPANY      SUBSIDIARIES        SUBSIDIARIES      ELIMINATIONS     CONSOLIDATED
<S>                                      <C>           <C>            <C>                  <C>                 <C>
Operating activities
Net income (loss).....................   $  (9,399)     $    (9,229)  $             (170)  $        9,399      $      (9,399)

Adjustment  to  reconcile  net  income
(loss) to net cash and cash  equivalents
provided by (used in) operating activities:
  Loss on investment in subsidiaries..        9,399               --                   --          (9,399)                 --
  Depreciation........................           --            6,056                  239               --              6,295
  Amortization........................           --              585                                    --                585
  Loss on disposal of assets..........           --               --                   --               --                 --
  Changes of liabilities subject to
     Compromise.......................           --         (22,442)                   --               --           (22,442)
  Changes in operating assets and                --         (24,281)              (5,455)               --           (29,736)
     liabilities......................           --         --------              -------               --           --------

Net cash and cash equivalents used in
operating activities..................           --         (49,311)              (5,386)               --           (54,697)

Investing activities
Purchase of fixed assets..............           --          (7,446)                (194)               --            (7,640)
Proceeds on disposal of fixed assets..           --               77                   --               --                 77
                                                 --               --                   --               --                 --
Net cash and cash equivalents used in
investing activities..................           --          (7,369)                (194)               --            (7,563)

Financing activities
Issuance of preferred stock...........           --           48,125                   --               --             48,125
Distribution to parent................           --         (87,522)                   --               --           (87,522)
Proceeds on long term debt............           --          226,000                   --               --            226,000
Principle payments on long term debt..           --          (4,000)                   --               --            (4,000)
Net borrowings under line-of-credit...           --           14,771                5,442               --             20,213
Principal payments on pre-petition
credit facility.......................           --        (146,490)                   --               --          (146,490)
Principal payments on capital leases..           --          (2,373)                 (23)               --            (2,396)
                                                 --          -------                 ----               --            -------
Net cash and cash equivalents
provided by financing activities......           --           48,511                5,419               --             53,930
Effect of foreign currency translation           --               --                 (36)               --               (36)
Net change in cash and cash                      --          (8,169)                (197)               --            (8,366)
equivalents...........................

Cash and cash equivalents at
beginning of year.....................           --            9,551                  468               --             10,019
                                                 --            -----                  ---               --             ------

Cash and cash equivalents at end of        $     --      $     1,382        $         271      $        --      $       1,653
period................................           ==            =====                  ===               ==              =====

                                      F-16
</TABLE>

<PAGE>



7.  Long-Term Obligations and Financing Agreement

Effective  September 30, 1999, the Company amended certain  financial  covenants
under its existing Senior Credit  Facility.  The amended  covenants  provide the
Company with greater operating  flexibility  through fiscal 2004. As a result of
the  amendments,  the  rates  for  the  Term A and  Term B loans  were  amended,
effective September 30, 1999. The interest rate for the Term A loan was modified
to LIBOR  plus 300  basis  points  or the  alternative  base rate plus 200 basis
points  and  interest  on the Term B loan was  modified  to LIBOR plus 350 basis
points or the  alternative  base rate plus 250  basis  points.  The  alternative
interest rates continue to be at the Company's  option.  In connection  with the
amendments  discussed  above, the Company entered into an Investment and Deposit
agreement dated September 30, 1999 between Vestar Capital Partners III, L.P. and
Bank of America N.A. The Investment and Deposit  agreement  provides the Company
with the  requirement  of additional  equity capital of up to $30 million in the
event the Company defaults on certain of the amended financial covenants.

In  addition,  the Company  has entered  into a $3.0  million  revolving  credit
facility  with the Bank of America  N.A.  The  facility  expires on December 31,
2000; interest on any borrowings accrues at either, at the Company's option, the
Eurodollar rate plus 150 basis points or the Prime rate plus 50 basis points.

                                      F-17

<PAGE>


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

Results of Operations: Thirteen weeks ended October 2, 1999 vs.
                       September 26, 1998

The  following  table is derived from the Company's  Consolidated  Statements of
Operations and sets forth, for the period  indicated,  net sales,  gross profit,
operating income, interest expense and net loss of the Company:
<TABLE>
                                                                                    Thirteen weeks ended
                                                                                 October 2,   September 26,
                                                                                    1999           1998
                                                                               ------------------------------
                                                                                   (Dollars In Thousands)
<S>                                                                               <C>             <C>
Net sales.................................................................         $87,438        $93,264
Gross profit..............................................................          22,492         27,007
Operating income .........................................................           2,030          5,878
Interest expense .........................................................           6,726          6,281
Net loss..................................................................         $(4,939)         $(715)
</TABLE>

Net  Sales:  For the third  quarter  1999,  net sales  for  reportable  segments
(excludes YSL, Burberrys and the Canadian retail terminated  businesses) were up
1% versus the prior year.  The Sock Group  recorded a 2% third quarter net sales
increase versus the same period last year, while the Shirt Group's third quarter
net sales were flat.  The third  quarter  net sales  growth  from the Sock Group
relates to a rebound in Gold Toe sales from a sluggish  first  quarter  combined
with solid growth in the Nautica, Kenneth Cole and Jockey sock offerings.

Net sales in the third  quarter for the All Other segment were down $6.9 million
from the prior year  reflecting  the exit from the YSL,  Burberrys  and Canadian
retail store businesses.

Gross Profit:  For the third quarter,  1999, gross profit decreased $4.5 million
from the third quarter of 1998 as a gross profit  increase in the Sock Group was
more than offset by a gross profit  decrease in the Shirt Group.  The Sock Group
improved its third  quarter gross margin from 32.6% to 33.1%.  This  improvement
relates to a combination of improved  productivity,  better overhead  absorption
and material  cost  reductions.  This pick up in gross margin  occurred  despite
costly  returns and  restocking  activity  during the quarter  which has removed
certain  slower  moving items and improved the Sock Groups sales turn at retail.
The Shirt Group's gross margins were adversely impacted by a number of key items
including:   a  decline  in  staple  dress  shirt  demand,  the  bankruptcy  and
liquidation of Eaton's (Canada), improved dress shirt make without an offsetting
price  increase,   increased  markdown  and  allowances  relating  primarily  to
sportswear,  and  substantial  new product launch  expense (i.e.,  Kenneth Cole,
Urban Arrow, Khaki's by Arrow, and private label) which require special handling
or manufacturing approaches.

Operating Income:  The Company's  operating income, for the third quarter ending
October 2, 1999  declined to $2.0  million from $5.9 million for the same period
last year.  Despite a $0.8 million or 11% increase in operating  income from the
Sock Group, the Shirt Group's  operating  income declined $6.4 million.  The key
source of the Shirt Group's  decrease was a gross profit decline of $5.4 million
and a $1.0  million  increase  in overall  selling,  distribution,  general  and
administrative  spending.  The increased S,G&A expense relates  primarily to new
product  launches  and  revenue  initiatives.  Additionally,  during  the  third
quarter,  the Company incurred facility closing and reengineering  costs of $1.5
million as a result of the consolidation of certain administrative functions and
the closure of a Shirt Group manufacturing facility. Operating losses in the All
Other segment  decreased $3.3 million to $1.0 million for the third quarter 1999
from the same period last year.  This  improvement  results from the exit of the
YSL, Burberrys and Candian Retail businesses during 1998.

Interest expense: Interest expense increased $0.4 million for the thirteen weeks
ended  October  2, 1999 over the prior  year as a result of higher  debt  levels
during the quarter.


                                       1
<PAGE>


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

Net loss:  Net loss for the thirteen  weeks ended  October 2, 1999  increased to
$4.9  million  from a loss of $0.7  million  for the same  period in 1998.  This
additional  loss was related to the  facility  closing and  reengineering  costs
recorded in the third quarter, the decline in the Shirt Group's operating profit
and the Company's overall increased interest expense.

On July 13, 1999, the Company  acquired 100% of the outstanding  common stock of
Central American Tailoring (CAT),  incorporated under the laws of Honduras,  for
$5.0  million  including  related  acquisition  costs.  CAT had  been a  captive
contractor  providing sewing services.  The purchase price was comprised of cash
of $1.6 million,  the issuance of a $2.9 million  long-term note and acquisition
related costs of $0.5 million. The cash payment was financed primarily under the
Company's  revolving credit  agreement.  The acquisition was accounted for using
the purchase  method of accounting.  Accordingly,  the assets and liabilities of
the  acquired  business  are included in the  consolidated  balance  sheet as of
October  2,  1999.  The  operating  results  of CAT have  been  included  in the
consolidated  statements of operations from the date of acquisition.  The excess
purchase  price  over the fair  market  value of the  underlying  assets of $4.7
million was allocated to goodwill.

In order to reduce its  domestic to imported  goods  manufacturing  ratio and to
improve productivity and asset utilization,  the Company announced, on August 2,
1999,  plans to close its owned  manufacturing  facility  located in Enterprise,
Alabama.  The closure,  which was  completed on October 15, 1999, is expected to
yield  annual  pre-tax  cost  savings  of   approximately   $3.2  million.   The
restructuring  plan,  which is anticipated to cost  approximately  $1.8 million,
includes  severance  and benefits to terminate  approximately  280 employees and
costs  related to the physical  closure of the  facility.  The Company  recorded
facility  closing  and  reengineering  costs of $1.5  million  during  the third
quarter in  accordance  with the  requirements  of  Emerging  Issues  Task Force
Pronouncement 94-3.


Results of Operations: Thirty-nine weeks ended October 2, 1999 vs.
                       September 26, 1998

The  following  table is derived from the Company's  Consolidated  Statements of
Operations and sets forth, for the period  indicated,  net sales,  gross profit,
operating income,  interest  expense,  bankruptcy  reorganization  costs and net
income (loss) of the Company:
<TABLE>
                                                                                   Thirty-nine weeks ended
                                                                                 October 2,   September 26,
                                                                                    1999           1998
                                                                               ------------------------------
                                                                                   (Dollars In Thousands)
<S>                                                                              <C>             <C>
Net sales.................................................................        $247,756       $261,898
Gross profit..............................................................          68,713         79,203
Operating income .........................................................           8,610         18,223
Interest expense .........................................................          19,408         13,544
Bankruptcy reorganization costs...........................................              --         13,179
Net loss..................................................................        $(11,628)       $(9,399)
</TABLE>

Net Sales:  For the  thirty-nine  weeks  ended  October  2, 1999,  net sales for
reportable  segments (excludes the YSL, Burberrys and Canadian retail terminated
businesses)  were up  approximately  1% versus  the prior  year.  The Sock Group
recorded a 2% net sales  increase  versus the same period  last year,  while the
Shirt  Group had a 1% net  sales  decrease.  Net sales in the All Other  segment
(YSL,  Burberrys and Canadian retail  business) were down $17.2 million from the
prior year  reflecting the decision to exit the businesses in 1998. $5.6 million
of All  Other net sales in the  first  six  months of 1999  represent  the final
liquidation of the YSL and Burberrys inventory.

                                       2
<PAGE>



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

Gross Profit:  For the  thirty-nine  weeks ended  October 2, 1999,  gross profit
decreased $10.5 million (with $3.6 million of the deterioration  relating to the
All Other or  terminated  businesses)  versus the same period in 1998.  The Sock
Group  improved its  year-to-date  gross  margin from 32.2% to 34.3%.  The Shirt
Group's  gross  margin  decreased  from  29.4% to  21.9%.  The  reasons  for the
improvement,  in the case of the Sock Group, and the decline, in the case of the
Shirt Group,  are  consistent  with those as outlined  for the third  quarter of
1999.

Operating  Income:  The Company's  operating income declined to $8.6 million for
the  thirty-nine  weeks  ended  October 2, 1999 from $18.2  million for the same
period in 1998,  primarily due to the Shirt  Group's gross margin  deterioration
and increased SG&A expense levels associated with new product launches.

Interest  expense:  Interest expense  increased $5.9 million for the thirty-nine
weeks ended October 2, 1999 as a result of higher debt levels existing after the
Recapitalization which was completed on May 18, 1998.

Bankruptcy  Reorganization Costs: The Company's bankruptcy proceedings concluded
in May 1998. As a result, there were no bankruptcy  reorganization costs for the
thirty-nine  weeks  ended  October  2, 1999.  For the  thirty-nine  weeks  ended
September 26, 1998,  bankruptcy  reorganization costs represented the payment of
post-petition  interest,  default  interest and fees to creditors in  accordance
with the terms of the bankruptcy reorganization plan.

Net loss:  Net loss for the  thirty-nine  weeks ended October 2, 1999  increased
$2.2 million to a loss of $11.6 million from a loss of $9.4 million for the same
period in 1998 for the reason stated above.

In a continuing effort to reduce operating costs and increase efficiencies,  the
Company  incurred net facility closing and  reengineering  costs of $2.3 million
for the thirty-nine weeks ended October 2, 1999, as a result of the closure of a
manufacturing  facility and the  consolidation  of certain  functions within the
Shirt Group.  The  consolidation  and the closure are expected to yield combined
annual pretax cost savings of approximately $3.2 million beginning in 2000.


Liquidity and Capital Resources

The Company's primary cash  requirements are to fund working capital  (primarily
inventory and accounts  receivable),  the purchase of property and equipment and
the payment of debt  service  requirements  related to the  Company's  financing
agreements.  The Company has a Senior Credit Facility  comprised of three loans,
including  a revolving  credit  facility  under  which the  Company  may, at its
option,  borrow  and repay  amounts  within  certain  limits.  The total  amount
available to the Company under the revolving  credit  facility is $50.0 million,
subject to certain customary drawing  conditions;  the revolving credit facility
matures in 2004.  Interest for borrowings under the revolving credit facility is
based on either,  at the  Company's  option,  LIBOR plus 300 basis points or the
Alternative  Base rate plus 200 basis  points.  In  addition,  the  Company  has
obtained a $3.0 million  revolving credit facility which bears interest,  at the
Company's  option,  at eiterh the  Eurodollar  rate plus 150 basis points or the
Prime rate plus 50 basis  points and expires on December  31,  2000.The  Company
believes that its borrowing  capacity  under these  facilities  plus  internally
generated  funds are adequate to fund its capital  expenditures  and its working
capital and debt service requirements.

                                       3
<PAGE>
The Senior Credit  Facility  (which was amended on December 18, 1998,  March 19,
1999 and September 30, 1999) is secured by virtually all domestic  assets of the
Company and its domestic  subsidiaries  and 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,  each of which is tested as of the last day of each
fiscal quarter of the Company. During the third quarter, the Company obtained an
amendment to the Senior Credit  Facility  which, in exchange for a commitment by
Vestar  Capital  Partners III, L.P. to infuse up to $30 million of new equity if
certain  leverage ratios are not met,  provides the Company with a new financial
covenant  package.  As a result of  obtaining  this  amendment,  the Company has
reclassified the obligations under the Senior Credit Facility as long-term.

The Company  typically  makes  capital  expenditures  related  primarily  to the
maintenance and improvement of manufacturing facilities, equipment modernization
and  acquisitions.  Net capital spending for the first thirty-nine weeks of 1999
and 1998 was $12.0  million  and $7.6  million,  respectively.  The  increase in
capital  expenditures  relates to the 100% stock acquisition of CAT,  previously
discussed.   The  Company   anticipates   overall  capital  spending  (excluding
acquisitions)  levels for 1999 to be approximately  $9.3 million.  The Company's
principal  sources  of cash to fund  these  capital  requirements  are net  cash
provided by operating  activities as well as  borrowings,  if needed,  under its
Senior Credit Facility.

Net cash used by operations for the thirty-nine  weeks ended October 2, 1999 was
$22.4  million,  as compared  to $54.7  million for the same period in the prior
year. The  significant  improvement in cash used by operations was primarily due
to the settlement of certain prepetition liabilities, which were paid during the
second  quarter  of 1998.  For  1999,  the net cash used by  operations  results
primarily from an inventory  increase at the Shirt Group.  Inventory levels were
higher at the Shirt  Group  because of the growth in  Kenneth  Cole,  the timing
differences of shipments and a build up in staple dress shirt inventory  arising
out of sales softness during the period.

For the thirty-nine  weeks ended October 2, 1999, net cash provided by financing
activities  was $38.6 million  compared  with $53.9 million for the  thirty-nine
weeks ended September 26, 1998.


                                       4
<PAGE>


Year 2000 Risk

As is more fully described in the Company's Annual Report filed on Form 10-K for
the fiscal year ended  December 31,  1998,  the Company has  undertaken  various
initiatives  intended to ensure that its computer  equipment  and software  will
function  properly with respect to dates in the year 2000 and thereafter.  Based
upon its  identification  and assessment  efforts,  the Company  replaced and or
modified certain of the computer equipment and software it uses. In addition, in
the ordinary course of replacing  computer  equipment and software,  the Company
obtained replacements that it believes are Year 2000 compliant. As of October 2,
1999,  the Company  believes  that the Year 2000 program is nearing  completion.
Most of the project  effort is focused on  completing  the  Business  Continuity
Plan. The Company  believes that the Business  Continuity Plan will be completed
by mid-December 1999.
<TABLE>
<S>                                                                          <C>                           <C>

                    YEAR 2000 INITIATIVE                                       TIME FRAME                PERCENT COMPLETE

Initial IT Systems Assessment                                                 December 1998                  100%
Remediation and Testing of Central/Distribution Systems                       November 1999                   90%
Remediation and Testing of Store/Distribution Systems                         November 1999                   90%
Upgrades to Telephone/PBX/Other Systems                                       December 1999                   75%
EDI Trading Partner Conversions                                               November 1999                   90%
Identification, Assessment, Remediation, & Testing
of Desktop Systems                                                            November 1999                   90%
Identification, Assessment & Testing of Non-IT Systems                        December 1998                  100%
</TABLE>

The  Company  has  also  mailed  letters  to its  significant  vendors,  service
providers and customers to determine  the extent to which  interfaces  with such
entities  are  vulnerable  to Year 2000  issues and  whether  the  products  and
services  purchased  from or by such  entities  are Year 2000  compliant.  As of
October 1999, the Company has received  responses from approximately 90% of such
third  parties,  and 100% of the  companies  that have  responded  have provided
written  assurances that they expect to address all their  significant Year 2000
issues on a timely basis.

The Company believes that the cost of its Year 2000 identification,  assessment,
remediation,  and testing efforts, as well as currently  anticipated costs to be
incurred by the Company with respect to Year 2000 issues of third parties,  will
not exceed  $600,000,  which  expenditures  will be funded from  operating  cash
flows.  Such amount  represents  less than 3% of the Company's  total actual and
anticipated IT  expenditures  for fiscal 1997 through fiscal 1999. As of October
21, 1999, the Company had incurred costs of  approximately  $500,000  related to
its Year 2000 identification,  assessment, remediation, and testing efforts. All
of the  $500,000  relates  to  analysis,  repair,  or  replacement  of  existing
software,  upgrades to existing software,  or evaluation of information received
from significant vendors, service providers or customers. Other non-Year 2000 IT
efforts have not been materially  delayed or impacted by Year 2000  initiatives.
The  Company  presently  believes  that  the  Year  2000  issue  will  not  pose
significant  operational  problems  for the Company.  However,  if all Year 2000
issues are not properly identified, or assessment,  remediation, and testing are
not effected  timely with  respect to Year 2000  problems  that are  identified,
there can be no assurance that the Year 2000 issue will not materially adversely
impact the Company's  results of  operations  or adversely  affect the Company's
relationships with customers, vendors or others.  Additionally,  there can be no
assurance  that the Year 2000 issues of other  entities will not have a material
adverse impact on the Company's systems or results of operations.

The Company has completed a comprehensive  analysis of the operational  problems
and costs (including loss of revenues) that would be reasonably likely to result
from the failure by the Company and certain third parties to complete efforts to
achieve Year 2000  compliance  on a timely  basis.  Contingency  plans are being
developed for dealing with the most reasonably likely worst case scenario.

The Company has engaged its  independent  auditor  Ernst & Young to evaluate its
Year 2000 identification,  assessment, remediation, and testing efforts. Results
of this initiative are forthcoming.

                                       5
<PAGE>
The costs of the Company's Year 2000  identification,  assessment,  remediation,
and testing efforts and the dates on which the Company believes it has completed
such  efforts are based upon  management's  best  estimates,  which were derived
using numerous  assumptions  regarding  future  events,  including the continued
availability of certain  resources,  third-party  remediation  plans,  and other
factors.  There  can be no  assurance  that  these  estimates  will  prove to be
accurate  and actual  results  could  differ  materially  from  those  currently
anticipated.  Specific  factors  that  could  cause  such  material  differences
include,  but are not limited to, the availability and cost of personnel trained
in Year 2000 issues, the ability to identify,  assess,  remediate,  and test all
relevant computer codes and imbedded technology,  and similar uncertainties.  In
addition,  variability of  definitions  of  "compliance  with Year 2000" and the
myriad of different products and services, and combinations thereof, sold by the
Company  may  lead to  claims  whose  impact  on the  Company  is not  currently
estimable.  No assurance can be given that the  aggregate  cost of defending and
resolving  such  claims,  if any,  will  not  materially  adversely  affect  the
Company's results of operations.  Although some of the Company's agreements with
manufacturers  and others from whom it  purchases  products  for resale  contain
provisions   requiring   such  parties  to  indemnify  the  Company  under  some
circumstances,  there can be no assurance that such indemnification arrangements
will cover all of the Company's liabilities and costs related to claims by third
parties related to the Year 2000 issue.


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 relatively weaker.



                                       6
<PAGE>


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,  financial condition,  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,  condition 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 men's dress shirts and 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,  preparing for the impact of year 2000
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.


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, 1998,  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, 1998.



                                       7
<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 October 2, 1999.

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 did not file any reports on Form 8-K during the  thirteen  weeks
    ended October 2, 1999

(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).

     2.3  Stockholders' 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).

                                       8
<PAGE>
    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  12  1/2%  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).

     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).

                                       9
<PAGE>
    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
          10.2.1 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  Exhibit10.2.1  to the Company's Annual
          Report on Form 10-K (Reg No. 333-58059) filed on March 29, 1999).

     *10.2.5 Investment and Deposit  Agreement  between Vestar Capital  Partners
          and Bank of America dated September 30, 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.

     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).

     +10.7Employment  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).

     +10.8Severance  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).

     +10.9Severance  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
<PAGE>
    +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).

     10.12Secured  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).

     10.13Form 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).

     +10.15  Severance  Agreement  dated as of January  16,  1996 by and between
          Bidermann  Industries  Corp.  and Steven J. Kaufman  (incorporated  by
          reference to Exhibit 10.15 to the Company's  Registration Statement on
          Form S-4/A (Reg. No. 333-58059) filed on October 15, 1998).

     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)

          +  This is a management contract or compensatory plan or arrangement

          *  Filed herewith


                                       11
<PAGE>



                                   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 11, 1999                /s/ Bryan P. Marsal
                                 -------------------------------------------
                                 Bryan P. Marsal
                                 Director, President and Chief Executive Officer


November 11, 1999                /s/ W. Todd Walter
                                 -------------------------------------------
                                 W. Todd Walter
                                 Vice President and  Chief Financial
                                 and Accounting Officer





                                       12
<PAGE>




EXHIBIT INDEX

10.2.4  Fourth  Amendment to the Credit  Agreement  and  Assignment  dated as of
        September 30, 1999

10.2.5 Investment and Deposit Agreement between Vestar Capital Partners III, L.P
       and Bank of America NA

10.2.6 Credit  Agreement  between Vestar Capital  Partners III, L.P. and Bank of
       America N.A.

27     Financial Data Schedule


                                       13
<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>
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 October 2, 1999:
    Deductions from
    asset accounts:
    Allowance for
    Doubtful                            $1,568          $  470 (a)       $  -- (b)         $  211(c)       $ 1,827
    Accounts
    Customer Allowances                  6,894           7,070              --              7,809(c)         6,155

    Inventory reserves                   5,149           2,165 (d)          --              4,171            3,143
                                         -----          ---------  -     --------        ----------          -----
           Total                       $13,611          $9,705           $  --           $ 12,191          $11,125
                                       =======       ============        ========        ==========        =======



<FN>
(a) Provision for doubtful accounts.
(b) Recoveries of doubtful accounts previously written off.
(c) Primarily  uncollectible  accounts  charged  against the allowance  provided
    therefor.
(d) Primarily related to the liquidation of excess inventory
</FN>
</TABLE>

                                       14