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 April 3, 1999

                                                        OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934 
For the transition  period from______________________ to _______________________
(Amended by Exch Act Rel  No. 312905. Eff 4/26/93.) 
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 April 3, 1999


<PAGE>


                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION

                                                                           Page
Item 1.  Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of April 3, 1999 and 
 December 31, 1998                                                         F-1

Condensed Consolidated Statements of Operations for the thirteen weeks 
 ended April 3, 1999 and March 28, 1998                                    F-2

Condensed Consolidated Statements of Cash Flows for the thirteen weeks 
 ended April 3, 1999 and March 28, 1998                                    F-3

Notes to Condensed Consolidated Financial Statements - April 3, 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.         5




                  PART II - OTHER INFORMATION



Item 1.   Legal Proceedings                                                  6

Item 4.   Submission of Matters to a Vote of Security Holders                6

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


SIGNATURES                                                                   9


<PAGE>
<TABLE>


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


                                                                                 April 3,     December 31,
                                                                                   1999           1998
                                                                               -----------------------------
                                                                               (Unaudited)    (Note 1)
<S>                                                                          <C>             <C> 
                                   Assets
Current assets:
   Cash and cash equivalents..........................................        $       481     $  2,868
   Accounts receivable, net...........................................             47,034       46,786
   Inventories .......................................................             84,110       74,599
   Prepaid expenses and other current assets..........................              3,426        3,972
                                                                              ----------------------------
Total current assets..................................................            135,051      128,225
Property, plant and equipment, net....................................             48,303       48,124
Pension assets........................................................             31,883       31,383
Deferred financing fees...............................................             11,247       11,198
Other noncurrent assets...............................................              1,822        1,845
                                                                              ============================
Total assets..........................................................           $228,306     $220,775
                                                                              ============================

                  Liabilities and stockholder's deficit Current liabilities:
   Accounts payable and accrued expenses..............................           $ 37,292    $  42,439
   Short-term debt and current portion of long-term debt..............             15,466       10,248
   Income taxes payable...............................................              1,537        1,475
                                                                              ----------------------------
Total current liabilities.............................................             54,295       54,162

Due to parent.........................................................             28,291       27,974
Long-term debt and capital lease obligations..........................            244,536      235,681
Dividends payable.....................................................              2,303          605
Other non-current liabilities.........................................                140          111
Senior exchangeable preferred stock, cumulative, $.01 par value:
   authorized 4,950,000, issued and outstanding 530,730 shares
   (liquidation preference of $53,035)................................             51,288       51,288
Stockholder's deficit:
   Common stock, $1 par value: authorized, issued and outstanding 1,000
      shares..........................................................                  1            1
   Additional paid-in capital.........................................            115,218      116,919
   Accumulated deficit................................................           (267,097)    (264,933)
   Other comprehensive income (loss)..................................               (669)      (1,033)
                                                                              ----------------------------
Total stockholder's deficit...........................................           (152,547)    (149,046)
                                                                              ============================
Total liabilities and stockholder's deficit...........................          $ 228,306    $ 220,775
                                                                              ============================

                                             See accompanying notes.
                                   
                                                     F-1
                                             
</TABLE>



<PAGE>
<TABLE>

                                   Cluett American Corp. and Subsidiaries
                            Condensed Consolidated Statements of Operations (Unaudited)
                                              (Dollars In Thousands)



                                                                                    Thirteen weeks ended
                                                                                  April 3,      March 28,
                                                                                    1999           1998
                                                                               ------------------------------

<S>                                                                             <C>            <C>    
                                                                                           
Net sales.................................................................         $81,099        $92,355
Cost of goods sold........................................................          57,387         63,906
                                                                               -------------------------------
Gross profit..............................................................          23,712         28,449

Selling, general and administrative expenses..............................          19,297         19,530
Facility closing and reengineering costs..................................               -            940
                                                                               -------------------------------
Operating income..........................................................           4,415          7,979
Interest expense, net.....................................................           6,287          3,811
Other expense, net........................................................              15             10
                                                                               -------------------------------
(Loss) income before reorganization costs and income taxes................          (1,887)         4,158
Bankruptcy reorganization costs...........................................               -          1,535
                                                                               -------------------------------
(Loss) income before provision for income taxes...........................          (1,887)         2,623
Provision for income taxes................................................             278            282
                                                                               ===============================
Net (loss) income ........................................................         $(2,165)        $2,341
                                                                               ===============================


                                                       See accompanying notes.
                                                       
                                                              F-2

</TABLE>

<PAGE>

<TABLE>

                                        Cluett American Corp. and Subsidiaries
                            Condensed Consolidated Statements of Cash Flows (Unaudited)
                                              (Dollars in Thousands)


                                                                                Thirteen weeks ended
                                                                               April 3,      March 28,
                                                                                 1999           1998
                                                                            ------------------------------
<S>                                                                             <C>            <C>      
Operating activities
Net (loss) income .................................................             $(2,165)       $2,341
Adjustment to reconcile net (loss) income to net cash and cash
   equivalents used in operating activities:
   Depreciation and amortization...................................               2,827         2,106
   Loss on disposal................................................                  12           718

Changes in operating assets and liabilities:
   Accounts receivable.............................................                 (66)       (4,269)
   Inventories.....................................................              (9,054)          586
   Prepaid expenses and other current assets.......................                 574         1,156
   Pension and other noncurrent assets.............................                (891)         (495)
   Accounts payable and accrued expenses...........................              (5,391)       (3,401)
   Income taxes payable............................................                  62          (451)
   Other liabilities...............................................                 439          (427)
   Effect of changes in foreign currency...........................                 (59)            -
                                                                            ----------------------------
Net cash and cash equivalents used in operating activities.........             (13,712)       (2,136)

Investing activities
Purchase of fixed assets...........................................              (2,555)       (2,649)
Proceeds on disposal of fixed assets...............................                   1           465
                                                                            ----------------------------
Net cash and cash equivalents used in investing activities.........              (2,554)       (2,184)

Financing activities
Principal payments on long term debt (Note 4)......................                (650)         (288)
Net borrowings under line-of-credit agreement (Note 4).............              14,524         4,799
Principal payments on capital leases...............................                  (4)            -
                                                                            ----------------------------
Net cash and cash equivalents provided by financing activities.....              13,870         4,511

Effect of foreign currency translation.............................                   9             -
                                                                            ----------------------------
Net change in cash and cash equivalents............................              (2,387)          191
Cash and cash equivalents at beginning of period...................               2,868        10,019
                                                                            ============================
Cash and cash equivalents at end of period.........................         $       481       $10,210
                                                                                   
                                                                            ============================


                                              See accompanying notes.

                                                       F-3
</TABLE>


<PAGE>

                         Cluett American Corp. and Subsidiaries
               Notes to Condensed Consolidated Financial Statements (Unaudited)


1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Cluett
American  Corp.  and  Subsidiaries,   (the  "Company")  have  been  prepared  in
accordance with 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-week period ended April 3, 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
April 3, 1999 and March 28, 1998, respectively.

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

2. Inventories

         Inventories consist of the following:
<TABLE>
                                                                  April 3,           December 31,
                                                                    1999                 1998
                                                             ------------------ -----------------
                                                                   (Dollars In Thousands)
<S>                                                                <C>               <C> 
Finished goods                                                     $67,671            $60,134
Work in process                                                      5,344              4,189
Raw materials and supplies                                          11,095             10,276
                                                             ================== =================
                                                                   $84,110            $74,599
                                                             ================== =================
</TABLE>

                                                  F-4

<PAGE>


                    Cluett American Corp. and Subsidiaries
    Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


3. Comprehensive Income

Statement  of  Financial  Accounting  Standards  No. 130 (SFAS 130),  "Reporting
Comprehensive  Income" establishes new rules for reporting  comprehensive income
and its  components.  SFAS 130 is  effective  for fiscal  year  beginning  after
December 15, 1997,  and was adopted by the Company for the fiscal year beginning
January 1, 1998. There was no impact on net income or shareholders'  equity from
the adoption of the statement.

For the  periods  ending  April 3, 1999 and March 28,  1998,  accumulated  other
comprehensive  income as shown in the consolidated  balance sheets was comprised
of foreign  currency  translation  adjustments,  which prior to the adoption was
reported  separately in  shareholders'  equity.  The components of comprehensive
income (loss), for these periods were as follows:

<TABLE>

                                                                       Thirteen
                                                                     Weeks Ended
                                                            April 3, 1999   March 28,1998
                                                           --------------- ---------------
                                                               (Dollars In Thousands)
<S>                                                            <C>             <C>    
Net income (loss)                                               $(2,165)       $2,341
Foreign currency translation adjustment                             364         (718)
                                                           =============== ===============
Comprehensive income (loss)                                     $(1,801)       $1,623
                                                           =============== ===============

</TABLE>

                                                  F-5

<PAGE>

                    Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


4. Segment Data

The Company  identifies its reportable  segments based on the segment's  product
offerings.  For the quarter  ended  April 3, 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 has entered into  agreements  to terminate the Burberrys and YSL license
agreements and will no longer distribute  products under these brands after 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  (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. The Kenneth Cole business began operations during the second quarter of
1998, therefore, there were no adjustments to prior year's first quarter segment
results for this brand. During the second quarter,  the Company plans to restate
both the Sock Group and Shirt  Group  prior  year's  financial  results  for the
addition of the Kenneth Cole brand.

<TABLE>

                                                                    April 3, 1999            March 28, 1998
                                                                    -------------            --------------
                                                                             (Dollars In Thousands)
<S>                                        <C>                            <C>                      <C>  
Net Sales
                                           Sock                           $34,138                  $36, 193
                                           Shirt                           45,017                    49,536
                                           All Other                        3,702                     8,659
                                           Intersegment                   (1,758)                   (2,033)
                                                                          -------                   -------
                                                                           81,099                    92,355
                                                                           ======                    ======
Operating   Income   excluding   facility
closing and reengineering costs
                                           Sock                             4,522                     4,906
                                           Shirt                              285                     4,503
                                           All Other                        (392)                     (490)
                                                                            -----                     -----
                                                                            4,415                     8,919
                                                                            =====                     =====
Depreciation and Amortization
                                           Sock                             1,510                     1,335
                                           Shirt                              922                       761
                                           All Other                           --                        --
                                                                               --                        --
                                                                            2,432                     2,096
                                                                            =====                     =====

Identifiable Assets
                                           Sock                            78,614                    74,561
                                           Shirt                          101,886                   101,313
                                           All Other                        4,864                    16,113
                                                                            -----                    ------
                                                                         $185,364                  $191,987
                                                                         ========                  ========

</TABLE>

                                                  F-6

<PAGE>


                    Cluett American Corp. and Subsidiaries
    Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


4. Segment Data (Continued)

Reconciliation of Reportable Segments Net Sales, Operating Income and 
Identifiable Assets

<TABLE>

                                                                  April 3, 1999             March 28, 1998
                                                                  -------------             --------------
                                                                           (Dollars In Thousands)
   <S>                                                                 <C>                       <C>                            
   Net Sales
       Total net sales for reportable  segments                        $ 79,155                  $ 85,729
       Other net sales                                                    3,702                     8,659
       Elimination of intersegment net sales                             (1,758)                   (2,033)
                                                                        -------                   -------
             Total consolidated net sales                                81,099                    92,355
                                                                         ======                    ======


   Operating Profit (Loss)
       Total operating profit or loss
          for reportable segments                                         4,807                     9,409
       Other operating profit or loss                                       --                       (531)
       Unallocated amounts:
          Corporate income (expense)                                       (392)                       41
          Facility closing and reengineering costs                          --                       (940)
                                                                          -----                     -----

             Total operating profit (loss)                                4,415                     7,979
                                                                          =====                     =====

   Depreciation and Amortization
      Total D&A for reportable segments                                   2,432                     2,096
      Adjustments                                                           395                        10
                                                                           ----                        --
                                                                          2,827                     2,106
                                                                          =====                     =====

   Assets
       Total assets for reportable segments                             180,500                   175,874
       All other assets                                                   4,864                    16,113
       Unallocated amounts:
          Deferred finance costs                                         11,247                        --
          Pension assets                                                 31,883                    30,726
          Other unallocated amounts                                        (188)                      595
                                                                          -----                     -----

             Consolidated total                                        $228,306                  $223,308
                                                                       ========                  ========


</TABLE>

                                                  F-7


<PAGE>

                    Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. 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>

                    Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                  APRIL 3, 1999
<TABLE>

                                                                  (DOLLARS IN THOUSANDS)
                                        PARENT         GUARANTOR       NON-GUARANTOR
                                         COMPANY     SUBSIDIARIES       SUBSIDIARIES       ELIMINATIONS       CONSOLIDATED
<S>                                    <C>             <C>              <C>                <C>                <C>            
Assets
Current assets:
   Cash and cash equivalents......       $      --      $       315      $     166          $      --         $      481
   Accounts receivable, net.......              --           40,851          6,183                 --             47,034
   Inventories (Note 2)...........              --           69,790         14,320                 --             84,110
   Prepaid expenses and other
      current assets..............              --            2,620            806                 --              3,426
                                                --            -----            ---                 --              -----
Total current assets..............              --          113,576         21,475                 --            135,051
Investment in subsidiaries........        (88,495)               --             --             88,495                 --
Intercompany receivable (payable)          15,000           (15,000)            --                 --                 --

Property, plant and equipment, net              --           46,297          2,006                 --             48,303
Pension assets....................              --           31,883             --                 --             31,883
Deferred financing fees...........              --           11,247             --                 --             11,247
Other noncurrent assets...........              --            1,002            820                 --              1,822
                                                --            -----            ---                 --              -----
Total assets......................      $ (73,495)      $   189,005      $  24,301           $ 88,495         $  228,306
                                          ========          =======         ======             ======            =======


Current liabilities:
   Accounts payable and accrued
      expenses....................              --           34,120          3,172                 --             37,292    
   Short-term debt and current
      portion of long-term debt...              --            7,800          7,666                 --             15,466
   Income taxes payable...........              --            1,330            207                 --              1,537
                                                --            -----            ---                 --              -----
Total current liabilities.........              --           43,250          11,045                --             54,295

Due to parent.....................                           28,291                                               28,291
Long-term debt and capital lease
   obligations....................              --          244,300             236                 --           244,536
Dividends payable.................           2,303               --              --                 --             2,303
Other non-current liabilities.....              --              140              --                 --               140
Senior exchangeable preferred
   stock, cumulative, $.01 par
   value: authorized 4,950,000,
   issued and outstanding 530,730
   shares (liquidation preference
   of $53,035)
                                            51,288               --               --                 --            51,288
Stockholder's deficit.............       (127,086)        (126,976)           13,020             88,495          (152,547)
                                         ---------        ---------           ------             ------          ---------
Total liabilities and
   stockholder's deficit..........      $ (73,495)     $    189,005     $     24,301        $    88,495      $    228,306
                                          ========          =======           ======             ======            =======
</TABLE>

                                                  F-9
<PAGE>

                    Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 1998

<TABLE>
                                                                   (DOLLARS IN THOUSANDS)
                                        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....................        $     --     $     37,781      $        4,658       $         --      $      42,439
   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 preference of $53,035)      51,288               --                  --                 --             51,288
                                            
Stockholder's deficit.............       (123,223)        (123,158)              11,005             86,330          (149,046)
                                         ---------        ---------              ------             ------          ---------
Total liabilities and
   stockholder's deficit..........      $ (71,330)     $    186,026        $     19,749        $    86,330      $    220,775
                                          ========          =======              ======             ======            =======

</TABLE>

                                                  F-10
<PAGE>

               Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                  APRIL 3, 1999
<TABLE>

                                                                   (DOLLARS IN THOUSANDS)
                                         PARENT        GUARANTOR       NON-GUARANTOR
                                         COMPANY     SUBSIDIARIES       SUBSIDIARIES       ELIMINATIONS       CONSOLIDATED
<S>                                     <C>         <C>               <C>               <C>              <C>                      
Net sales.............................  $    --     $     73,295      $     7,804       $         --      $      81,099
                                             
Cost of goods sold....................       --           51,490            5,897                 --             57,387
                                             --           ------            -----                 --             ------
Gross profit..........................       --           21,805            1,907                 --             23,712

Selling, general and administrative
   expenses...........................       --           17,268            2,029                 --             19,297
                                             --           ------            -----                 --             ------
Operating income......................       --            4,537            (122)                 --              4,415
Loss on investments in subsidiaries ..   (2,165)              --               --              2,165                 --
Interest expense, net.................       --            6,169              118                 --              6,287
Other expense, net....................       --               15               --                 --                 15
                                             --               --               --                 --                 --
Income before reorganization costs
   and income taxes...................   (2,165)          (1,647)            (240)              2,165            (1,887)
Bankruptcy reorganization costs.......       --               --               --                 --                 --
                                             --               --               --                 --                 --
Income (loss) before provision for
   income taxes.......................   (2,165)          (1,647)            (240)              2,165            (1,887)
Provision for income taxes............       --              226               52                 --                278
                                             --              ---               --                 --                ---
Net loss..............................  $(2,165)     $    (1,873)      $     (292)      $       2,165     $      (2,165)
                                         =======          =======            =====              =====            =======

</TABLE>













                                                  F-11


<PAGE>

                     Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                                 MARCH 28, 1998
<TABLE>

                                                                   (DOLLARS IN THOUSANDS)
                                         PARENT       GUARANTOR        NON-GUARANTOR
                                         COMPANY     SUBSIDIARIES       SUBSIDIARIES       ELIMINATIONS       CONSOLIDATED
<S>                                    <C>          <C>              <C>               <C>               <C>
Net sales............................. $     --     $     82,242     $     10,113       $         --      $      92,355
Cost of goods sold....................       --           56,715            7,191                 --             63,906
                                             --           ------            -----                 --             ------
Gross profit..........................       --           25,527            2,922                 --             28,449

Selling, general and administrative
   expenses...........................       --           17,122            2,408                 --             19,530
Facility closing and reengineering
   costs..............................       --              940               --                 --                940
                                             --              ---               --                 --                ---
Operating income......................       --            7,465              514                 --              7,979
Income on investment in subsidiaries..    2,341               --               --             (2,341)                --
Interest expense, net.................       --            3,042              769                 --              3,811
Other (income) expense, net...........       --            (143)              153                 --                 10
                                             --            -----              ---                 --                 --
Income before reorganization costs
   and income taxes...................    2,341            4,566             (408)            (2,341)             4,158
Bankruptcy reorganization costs.......       --            1,535               --                 --              1,535
                                             --            -----               --                 --              -----
Income (loss) before provision for
   income taxes.......................    2,341            3,031             (408)            (2,341)             2,623
Provision for income taxes............       --              248               34                 --                282
                                             --              ---               --                 --                ---
Net income (loss).....................$   2,341      $     2,783      $      (442)     $      (2,341)      $      2,341
                                          =====            =====             =====            =======             =====
</TABLE>

                                                  F-12

<PAGE>

                     Cluett American Corp. and Subsidiaries
   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  APRIL 3, 1999
<TABLE>

                                                                     (DOLLARS IN THOUSANDS)
                                            PARENT       GUARANTOR         NON-GUARANTOR
                                            COMPANY     SUBSIDIARIES       SUBSIDIARIES      ELIMINATIONS     CONSOLIDATED
<S>                                     <C>            <C>               <C>               <C>             <C>
Operating activities
Net income (loss)....................... $ (2,165)     $    (1,873)       $       (292)     $     2,165     $      (2,165)
Adjustment to reconcile net income
(loss) to net cash and cash equivalents
provided by (used in) operating
activities:
  Loss on investments in subsidiaries...    2,165               --                  --          (2,165)                --
  Depreciation and amortization.........       --            2,748                  79              --              2,827
  Loss on disposal of assets............       --               12                  --              --                 12
  Changes in operating assets and              --          (10,467)             (3,919)             --            (14,386)
                                               --         --------             -------              --           --------
liabilities.............................
Net cash and cash equivalents used in
operating activities....................       --           (9,580)             (4,132)             --            (13,712)

Investing activities
Purchase of fixed assets................       --           (2,550)                 (5)             --             (2,555)
Proceeds on disposal of fixed assets....       --               --                   1              --                  1
                                               --               --                   -              --                  -
Net cash and cash equivalents used in
investing activities....................       --           (2,550)                 (4)             --             (2,554)

Financing activities
Proceeds on the credit facility.........       --           10,699               3,825              --             14,524
Principal payments on long term debt....       --             (650)                 --              --               (650)
Principal payments on capital leases....       --               --                  (4)             --                (4)
                                               --               --                 ---              --                ---
Net cash and cash equivalents provided
by financing activities.................       --           10,049               3,821              --             13,870
Effect of foreign currency translation..       --               --                   9              --                  9
                                               --               --                   -              --                  -

Net change in cash and cash equivalents.       --           (2,081)               (306)             --             (2,387)

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

Cash and cash equivalents at end of      $     --       $      315        $        166     $        --       $        481
                                               ==              ===                 ===              ==                ===
period..................................

</TABLE>

                                                  F-13

<PAGE>

                     Cluett American Corp. and Subsidiaries
  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


5. Guarantor Subsidiaries (Continued)

          SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                 MARCH 28, 1998
<TABLE>

                                                                  (DOLLARS IN THOUSANDS)
                                          PARENT       GUARANTOR        NON-GUARANTOR
                                          COMPANY     SUBSIDIARIES       SUBSIDIARIES       ELIMINATIONS      CONSOLIDATED
<S>                                   <C>            <C>               <C>            <C>                <C>                        
Operating activities
Net income (loss)..................... $   2,341      $     2,783       $     (442)    $     (2,341)      $       2,341
Adjustment to reconcile net income
(loss) to net cash and cash
equivalents provided by (used in)
operating activities:
  Gain on investment in subsidiaries..    (2,341)              --                --            2,341                 --
  Depreciation and amortization.......        --            2,025                81               --              2,106
  Loss on sale of fixed assets........        --              718                --               --                718
  Changes in operating assets and             --          (4,347)            (2,954)              --            (7,301)
                                              --          -------           -------               --            -------
liabilities...........................
Net cash and cash equivalents used in
operating activities..................        --            1,179            (3,315)              --            (2,136)

Investing activities
Purchase of fixed assets..............        --          (2,606)               (43)              --            (2,649)
Proceeds on disposal of fixed assets..        --              465                --               --                465
                                              --              ---                --               --                ---
Net cash and cash equivalents used in
investing activities..................        --          (2,141)               (43)              --            (2,184)

Financing activities
Principal payments on long term debt
(Note 4)..............................        --            (288)                --               --              (288)
Net borrowings under line-of-credit
agreement (Note 4)....................        --            1,566             3,233               --              4,799
                                              --            -----             -----               --              -----
Net cash and cash equivalents
provided by financing activities......        --            1,278             3,233               --              4,511

Net change in cash and cash                   --              316              (125)              --                191
equivalents...........................

Cash and cash equivalents at
beginning of year.....................        --            9,551               468               --             10,019
                                              --            -----               ---               --             ------
Cash and cash equivalents at end of     
 period................................  $    --      $     9,867         $     343      $        --      $      10,210    
                                              ==            =====               ===               ==             ======
</TABLE>

                                                  F-14

<PAGE>


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

Results of Operations: Thirteen weeks ended April 3, 1999 vs. March 28, 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>
<S>                                                                             <C>            <C>
                                                                                    Thirteen weeks ended
                                                                                  April 3,      March 28,
                                                                                    1999           1998
                                                                               ------------------------------
                                                                                   (Dollars In Thousands)

Net sales.................................................................         $81,099        $92,355
Gross profit..............................................................          23,712         28,449
Operating income .........................................................           4,415          7,979
Interest expense .........................................................           6,287          3,811
Bankruptcy reorganization costs...........................................              --          1,535
Net income(loss)..........................................................         $(2,165)        $2,341
</TABLE>



Net Sales:  For the first quarter 1999, net sales  decreased $11.3 million with
$6.6 million of the decline coming from reportable segments and the balance from
the winddown of the terminated YSL and Burberrys licenses.  The decline from the
reportable  segments  relates to the Sock Group,  which was down $2.0 million in
net  sales,  and the Shirt  Group,  which was down the  balance.  The Sock Group
decline  relates to a soft  holiday  season which left  inventory  levels at the
retailer  higher  than  normal,  reducing  reorders  in the  first  quarter.  In
addition,  approximately $1.0 million of this year-over-year  decline was due to
lower off-price and irregular sales.  The Shirt Group decline relates,  in equal
proportions,  to the loss of the Mercantile  business (i.e. acquired by Dillards
in 1998),  shipment  timing between  quarters,  a softness in staple dress shirt
demand at one of its key  accounts  and  reduced  sales  volumes at another  key
account following a new program sell-in during the first quarter 1998. Net sales
in the All Other  segment were down $5.0 million from the prior year  reflecting
management's  decision  in 1998 to exit the YSL and  Burberrys  businesses.  Net
sales of $3.7  million for the first  quarter 1999,  represent  the  continuing
liquidation of the inventory  associated with these businesses.  The cost of the
liquidation was reserved for in 1998.

Gross Profit:  For the first quarter 1999,  gross profit  decreased $4.7 million
compared with gross profit for the first quarter 1998.  The Sock Group  improved
its first  quarter gross margin from 32.1% to 34.6% of net sales year over year.
This $0.2 million  improvement  resulted from  favorable  cotton  prices,  lower
airfreight  and improved  manufacturing  efficiencies.  The Shirt  Group's gross
margin  decreased  from 28.9% of net sales to 26.4% for the same period in 1998.
This $3.0  million  drop was  caused  by a  combination  of  volume  shortfalls,
improved make in the shirts  without a  corresponding  price  increase and lower
manufacturing  efficiencies  versus  the prior  year.  The  balance of the gross
profit decline relates to the terminated licenses.

Operating Income:  The Company's  operating income declined to $4.4 million from
$8.0 million for the thirteen  weeks ended April 3, 1999,  primarily due to the
Shirt Group's reduced net sales volume and gross margin deterioration  discussed
above.

Interest expense: Interest expense increased $2.5 million for the thirteen weeks
ended  April 3,  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
thirteen weeks ended April 3, 1999. For the thirteen weeks ended March 28, 1998,
bankruptcy reorganization costs represented professional fees accrued.

Net (Loss) income:  Net (loss) income for the thirteen weeks ended April 3, 1999
decreased $4.5 million to a loss of $2.2 million from income of $2.3 million for
the same period in 1998. This reduction was primarily  related to the decline in
the Shirt Group's operating profit and the Company's overall increased  interest
expense.

                                       1
<PAGE>

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

In a continuing effort to reduce operating costs and increase efficiencies,  the
Company anticipates incurring restructuring costs between $750,000 and $850,000,
during the second quarter  1999, as a result  of the  consolidation  of  certain
administrative  operations  of the  Canadian  division  into the U.S.  Wholesale
division.  This  consolidation  is  expected  to yield  annual  cost  savings of
approximately $600,000.

Liquidity and Capital Resources

The  Company's  primary  cash  requirements  are to fund the  Company's  working
capital  needs,  primarily  inventory and accounts  receivable,  the purchase of
property and equipment and 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 250
basis points or the  Alternative  Base rate plus 150 basis  points.  The Company
believes  that its  borrowing  capacity  under  this  facility  plus  internally
generated  funds are adequate to fund its capital  expenditures  and its working
capital and debt service requirements.

The Senior Credit Facility (which was amended on December 18, 1998 and March 19,
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.  As of April 3, 1999,  the Company  complied with
all financial and non-financial covenants.

The Company  typically  makes  capital  expenditures  related  primarily  to the
maintenance   and   improvement  of   manufacturing   facilities  and  equipment
modernization. Net capital spending in both the first thirteen weeks of 1999 and
1998 was $2.6 million.  The Company  anticipates overall capital spending levels
for 1999 year 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 thirteen weeks ended April 3, 1999 was $13.7
million,  as compared to $2.1 million for the same period in the prior year. The
significant  increase  in  cash  used  by  operations  was  primarily  due to an
inventory build at the Sock Group and the Shirt Group,  where  inventory  levels
were $5.1 million and $9.1 million  higher than the  prior-year  period  levels,
respectively.  The Sock Group inventory  increase  relates to the rollout of new
programs,  the timing of inventory  sales  between  fiscal  quarters and a sales
volume  shortfall  in the  first  quarter  of 1999.  There  are no prior  season
inventory issues at the Sock Group.

Increased  inventory  levels at the Shirt Group are largely  attributable to the
timing of sales  between  fiscal  quarters  and the early  receipt of goods from
foreign suppliers,  as well as new program rollouts.  The remaining $3.0 million
increase  results from a sales volume  shortfall in the first quarter,  1999 and
excess  prior-season  merchandise;  a net  reduction  in inventory at the Cluett
Designer  Group in the first quarter 1999 partially  offset the increases  noted
above.

Also contributing to the increased use of cash during the first quarter 1999 was
the swing in net income,  from a positive $2.3 million in the first quarter 1998
to a negative  $2.2  million  for the same  period in 1999,  and a $2.0  million
year-over-year reduction in accounts payable and accrued expenses. The change in
net income is  discussed  in detail  above and the reduced  payables  are volume
related.

For the  thirteen  weeks  ended  April  3,  1999,  net  cash  used by  investing
activities  was $2.6 million  compared with $2.2 million for the thirteen  weeks
ended March 28,  1998.  Net cash  provided  by  financing  activities  was $13.9
million for the thirteen  weeks ended April 3, 1999  compared  with $4.5 million
for the thirteen  weeks ended March 28, 1998.  The increase in net cash provided
by financing  activities  resulted from  borrowings made under the Senior Credit
Facility to support seasonal working capital needs.

                                       2

<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 to date, the Company  believes
that certain of the  computer  equipment  and  software it  currently  uses will
require  replacement or  modification.  In addition,  in the ordinary  course of
replacing  computer  equipment  and  software,  the  Company  attempts to obtain
replacements  that it believes are Year 2000 compliant.  Utilizing both internal
and external resources to identify and assess needed Year 2000 remediation,  the
Company  currently  anticipates that its Year 2000  identification,  assessment,
remediation,  and testing efforts,  will be completed by June 30, 1999, and that
such efforts will be completed prior to any currently  anticipated impact on its
computer equipment and software.
<TABLE>

<S>                                                                   <C>                           <C>                        
                    YEAR 2000 INITIATIVE                                 TIME FRAME                 PERCENT COMPLETE

Initial IT Systems Assessment                                           December 1998                  100%
Remediation and Testing of Central/Distributed Systems                      June 1999                   75%
Remediation and Testing of Store/Distribution Systems                       June 1999                   75%
Upgrades to Telephone/PBX/Other Systems                                 December 1998                  100%
EDI Trading Partner Conversions                                             June 1999                   85%
Identification, Assessment, Remediation, &  Testing  of
 Desktop Systems                                                            June 1999                   85%
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 March
24, 1999,  the Company had received  responses  from  approximately  40% 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  $500,000,  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 May 5,
1999 the Company had incurred  costs of  approximately  $400,000  related to its
Year 2000 identification,  assessment,  remediation, and testing efforts. All of
the $400,000 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 begun,  but not yet completed,  a comprehensive  analysis of the
operational  problems  and costs  (including  loss of  revenues)  that  would be
reasonable  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. A
contingency  plan has not been  developed  for dealing with the most  reasonably
likely  worst  case  scenario,  and  such  scenario  has  not yet  been  clearly
identified.   The  Company   currently  plans  to  complete  such  analysis  and
contingency planning by December 31, 1999.

The  Company  has  engaged  an  independent  expert  to  evaluate  its Year 2000
identification, assessment, remediation, and testing efforts.

                                       3

<PAGE>

The costs of the Company's Year 2000  identification,  assessment,  remediation,
and testing efforts and the dates on which the Company believes it will complete
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.

                                       4

<PAGE>

Backlog and Seasonality

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

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

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

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


Cautionary Statement Regarding Forward-Looking Statements

The Quarterly Report on Form 10-Q contains certain statements which describe the
Company's beliefs concerning future business  conditions and the outlook for the
Company based on currently  available  information.  The preceding  Management's
Discussion  and  Analysis  contains  forward-looking  statements  regarding  the
Company's  performance,  liquidity  and the  adequacy of its capital  resources.
These forward looking  statements are subject to risks,  uncertainties and other
factors  which  could  cause  the  Company's  actual  results,   performance  or
achievement to differ  materially  from those  expressed in, or implied by these
statements.   As  a  result,  the  Company  cautions  that  the  forward-looking
statements are qualified by the financial  strength of the retail industry,  the
risks of increased  competition  from other  manufacturers of 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.

                                       5

<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 April 3, 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 April 3, 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).

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).

                                  6
<PAGE>
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).

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).

10.3 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).


                                       7

<PAGE>
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).

+10.11 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)

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

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

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

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

      +  This is a management contract or compensatory plan or arrangement

      *  Filed herewith


                                       8
<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


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


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




                                       9

<PAGE>




Item 6 (d). Financial Statement Schedules


                                                    SCHEDULE II

                                               CLUETT AMERICAN CORP.

                                         VALUATION AND QUALIFYING ACCOUNTS

                                              (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                  <C>               <C>       <C>         <C>               <C>               <C>           
COLUMN A                               COLUMN B                  COLUMN  C                  COLUMN D        COLUMN E
                                                                 ADDITIONS


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

Year Ended December 31, 1998:
    Deductions from
     asset accounts:
     Allowance for
     Doubtful Accounts                  $1,568              $ 227              $  --             $  14        $ 1,781
     Customer Allowances                 6,894              1,810                 --             3,006          5,698
     Inventory reserves                  5,149              1,654                 --             3,789          3,014
                                         -----              -----                 --             -----          -----
           Total                       $13,611             $3,691              $  --           $ 6,809        $10,493
                                       =======             ======                ===           =======        =======
</TABLE>




(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

                                       10