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 ending December 31, 2006

                                       OR

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the transition period from__________ to__________


                          Commission File Number 1-5354


                                  Jaclyn, Inc.
             (Exact name of registrant as specified in its charter)


                  Delaware                               22-1432053
     (State or other jurisdiction of                   (IRS Employer
      incorporation or organization)                Identification Number)


     635 59th Street, West New York, New Jersey             07093
      (Address of principal executive offices)            (Zip code)


                                 (201) 868-9400
              (Registrant's telephone number, including area code)


                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)


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

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

Large Accelerated Filer [ ]   Accelerated Filer [ ]   Non-Accelerated Filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ]  No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:

        Title of Class                    Shares Outstanding on February 1, 2007
-----------------------------             --------------------------------------
Common Stock, $1.00 par value                         2,484,671
<PAGE>

                          JACLYN, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

                                                 December 31,     June 30,
                                                     2006           2006
                                                 ------------   ------------
                                                  (Unaudited)   (See below)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                        $        383   $        932
Accounts receivable, net                               25,765         25,071
Inventory                                              10,146          7,180
Prepaid expenses and other current assets               3,489          3,862
                                                 ------------   ------------
TOTAL CURRENT ASSETS                                   39,783         37,045
                                                 ------------   ------------
PROPERTY PLANT AND EQUIPMENT, NET                       3,806          1,030
GOODWILL                                                3,338          3,338
OTHER ASSETS                                              488            289
                                                 ------------   ------------
TOTAL ASSETS                                     $     47,415   $     41,702
                                                 ============   ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable - bank                             $      9,380   $     10,185
Accounts payable                                        6,489          4,547
Other current liabilities                               7,410          5,360
                                                 ------------   ------------
TOTAL CURRENT LIABILITIES                              23,279         20,092
                                                 ------------   ------------
MORTGAGE PAYABLE                                        2,476          2,563

MINORITY INTEREST                                         479             --

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock                                            3,369          3,369
Additional paid-in capital                              9,559          9,563
Retained earnings                                      14,474         12,295
                                                 ------------   ------------
                                                       27,402         25,227
Less:  Common shares in treasury at cost                6,221          6,180
                                                 ------------   ------------
TOTAL STOCKHOLDERS' EQUITY                             21,181         19,047
                                                 ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $     47,415   $     41,702
                                                 ============   ============

The June 30, 2006 Balance Sheet is derived from audited financial statements.
See notes to condensed consolidated financial statements.


                                       2
<PAGE>
<TABLE>
<CAPTION>

                          JACLYN, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
               (In Thousands, Except Share and Per Share Amounts)

                                                               Three Months ended             Six Months ended
                                                                   December 31,                  December 31,
                                                               2006           2005           2006           2005
                                                           ------------   ------------   ------------   ------------
<S>                                                        <C>            <C>            <C>            <C>
Net sales                                                  $     47,584   $     35,514   $     88,208   $     64,762
Cost of goods sold                                               35,724         25,996         67,845         48,623
                                                           ------------   ------------   ------------   ------------
Gross profit                                                     11,860          9,518         20,363         16,139
                                                           ------------   ------------   ------------   ------------

Shipping, selling and administrative expenses                     8,649          7,592         16,039         13,801
Interest expense                                                    369            237            716            377
                                                           ------------   ------------   ------------   ------------
                                                                  9,018          7,829         16,755         14,178
                                                           ------------   ------------   ------------   ------------
Earnings before income taxes                                      2,842          1,689          3,608          1,961
Provision for income taxes                                        1,126            758          1,429            884
                                                           ------------   ------------   ------------   ------------
Net earnings                                               $      1,716   $        931   $      2,179   $      1,077
                                                           ============   ============   ============   ============
Net earnings per common share - basic                      $        .69   $        .38   $        .88   $        .43
                                                           ============   ============   ============   ============
Weighted average number of shares outstanding - basic         2,478,000      2,472,000      2,481,000      2,513,000
                                                           ============   ============   ============   ============
Net earnings per common share - diluted                    $        .68   $        .37   $        .86   $        .42
                                                           ============   ============   ============   ============
Weighted average number of shares outstanding - diluted       2,541,000      2,550,000      2,544,000      2,594,000
                                                           ============   ============   ============   ============
</TABLE>

       See notes to condensed consolidated unaudited financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                          JACLYN, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

                                                                                Six Months Ended
                                                                                  December 31,
                                                                              2006           2005
                                                                          ------------   ------------
<S>                                                                       <C>            <C>
  Cash Flows From Operating Activities:
  Net Earnings                                                            $      2,179   $      1,077
  Adjustments to reconcile net earnings to net cash provided by (used
     in) operating activities:

  Depreciation and amortization                                                    214            171
  Changes in assets and liabilities:
     Increase in accounts receivable, net                                         (694)        (3,191)
     Increase in inventory                                                      (2,966)        (5,450)
     Decrease in prepaid expense and other assets                                  169            637
     Increase in accounts payable and other current liabilities                  3,986          3,988
                                                                          ------------   ------------
  Net cash provided by (used in) operating activities                            2,888         (2,768)
                                                                          ------------   ------------
  Cash Flows From Investing Activities:
     Purchase of property and equipment                                            (85)           (67)
     Investment in leased building                                              (2,421)            --
                                                                          ------------   ------------
  Net cash used in investing activities                                         (2,506)           (67)
                                                                          ------------   ------------

  Cash Flows From Financing Activities:
     Net (decrease) increase in loans payable - bank                              (805)         3,485
     Payment of long-term debt                                                     (81)           (70)
     Repurchase of common stock                                                    (55)          (951)
     Exercise of stock options                                                      10             98
                                                                          ------------   ------------
Net cash (used in) provided by financing activities                               (931)         2,558
                                                                          ------------   ------------
Net decrease in Cash and Cash Equivalents                                         (549)          (277)
Cash and Cash Equivalents, beginning of period                                     932            893
                                                                          ------------   ------------
Cash and Cash Equivalents, end of period                                  $        383   $        616
                                                                          ------------   ------------
Supplemental Information:
  Interest paid                                                           $        687   $        322
                                                                          ------------   ------------
  Taxes paid                                                              $        642   $        280
                                                                          ------------   ------------
  Minority Interest                                                       $        479   $         --
                                                                          ------------   ------------
</TABLE>

See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                          JACLYN, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                         UNAUDITED FINANCIAL STATEMENTS

1.       Basis of Presentation:
         ----------------------

         The accompanying unaudited condensed consolidated balance sheet as of
December 31, 2006, the condensed consolidated statements of earnings and cash
flows for the three and six-month periods ended December 31, 2006 and 2005,
respectively, have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. These condensed
consolidated financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's 2006 Annual
Report to Stockholders for the year ended June 30, 2006. The results of
operations for the period ended December 31, 2006 are not necessarily indicative
of operating results for the full fiscal year.

         Consolidation of Variable Interest Entity - On August 22, 2006, the
Company entered into a lease agreement for a new corporate office building, and
plans to relocate the Company's executive offices from West New York, New Jersey
to Maywood, New Jersey during fiscal 2007. The lease has a 10-year term, and
grants to the Company an option to purchase the building at any time during the
term of the lease at a purchase price not to exceed $3,075,000, plus increases
based on a multiple of the consumer price index.

         The lessor, 195 Spring Valley Associates, LLC, (the "Lessor"),
purchased the corporate office building at a closing which also took place in
August 2006. The Company provided the Lessor with $2,200,000 in mortgage
financing, secured by a first priority mortgage in favor of the Company on the
land, office building, and other customary rights of the mortgagor. The Company
placed a deposit with the Lessor in the amount of $200,000 in connection with
the option to purchase the property.

         For accounting purposes, the Company determined that the Lessor is a
variable interest entity and the Company is its primary beneficiary as defined
by FASB Interpretation No. 46(R), "Consolidation of Variable Interest Entities"
("FIN 46(R)"). Accordingly, the financial statements of the Lessor have been
consolidated with those of the Company.

         The effect of the Company's consolidation of the Lessor is that the
lease transaction is treated as a financing, and the lease obligation, mortgage
notes and deposits have been eliminated in consolidation. The cost of the
building, approximately $2,900,000, and the unamortized capital of the equity
owners of the Lessor (minority interest), approximately $500,000, are reflected
in the December 31, 2006 Condensed Consolidated Balance Sheet. There was no
significant impact to net earnings.

                                       5
<PAGE>

2.       Stock-Based Compensation:
         -------------------------

         The Company recognizes stock-based compensation in accordance with
Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, a
revision of SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No.
123(R)"), as interpreted by SEC Staff Accounting Bulletin No. 107. Stock options
granted by the Company generally vest upon grant.

         The Company maintains two stockholder-approved Stock Option Plans for
key employees and consultants of the Company, and has terminated, effective
November 29, 2005, its 1996 Non-Employee Director Stock Option Plan (the "1996
Plan"). While no further options are being granted under the 1996 Plan, it
remains in effect for options outstanding.

         The 1990 Stock Option Plan of the Company, as amended (the "1990
Plan"), provided for the grant of an aggregate of 500,000 shares of Common
Stock. Options may no longer be granted under the 1990 Plan, although at
December 31, 2006 the 1990 Plan also remains in effect for options outstanding.

         The Company's 2000 Stock Option Plan, as amended (the "2000 Plan"),
initially provided for the grant of options to purchase up to 300,000 shares of
Common Stock. It was amended during fiscal 2004 to increase the number of shares
of Common Stock for which options may be granted by an additional 250,000
shares, to a total of 550,000 shares. At December 31, 2006, 205,000 shares were
available for future grants under the 2000 Plan, under which incentive and
non-statutory stock options may be granted to key executives, consultants,
directors and other key employees. Stock options may not be granted at less than
the fair market value at the date of grant or 110% of the fair market value for
individuals who own or are deemed to own more than 10% of the combined voting
power of all classes of stock of the Company. Stock options generally vest
immediately and generally are granted for a ten-year term.

         The Company did not grant any stock options during the first six months
of fiscal 2007 or fiscal 2006.

3.       Earnings Per Share:
         -------------------

         The Company's calculation of Basic and Diluted Net Earnings Per Common
Share follows (in thousands, except share amounts):


                                       6
<PAGE>
<TABLE>
<CAPTION>

                                                 Three Months Ended         Six Months Ended
                                                    December 31,              December 31,
                                                 2006         2005         2006         2005
                                              ----------   ----------   ----------   ----------
<S>                                           <C>          <C>          <C>          <C>
Basic Net Earnings Per Common Share:
Net Earnings                                  $    1,716   $      931   $    2,179   $    1,077
                                              -------------------------------------------------
Basic Weighted Average Shares Outstanding      2,478,000    2,472,000    2,481,000    2,513,000
                                              -------------------------------------------------
Basic Net Earnings Per Common Share           $      .69   $      .38   $      .88   $      .43
                                              -------------------------------------------------

<CAPTION>

                                                 Three Months Ended         Six Months Ended
                                                    December 31,              December 31,
                                                 2006         2005         2006         2005
                                              ----------   ----------   ----------   ----------
<S>                                           <C>          <C>          <C>          <C>
Diluted Net Earnings Per Common Share:
Net Earnings                                  $    1,716   $      931   $    2,179   $    1,077
                                              -------------------------------------------------
Basic Weighted Average Shares Outstanding      2,478,000    2,472,000    2,481,000    2,513,000
Add: Dilutive Options                             63,000       78,000       63,000       81,000
                                              -------------------------------------------------
Diluted Weighted Average Shares Outstanding    2,541,000    2,550,000    2,544,000    2,594,000
                                              -------------------------------------------------
Diluted Net Earnings Per Common Share         $      .68   $      .37   $      .86   $      .42
                                              -------------------------------------------------
</TABLE>

         There were no options to purchase shares of the Company's Common Stock
at December 31, 2006 or December 31, 2005 that were anti-dilutive. At December
31, 2006, there were 156,000 remaining options which can be exercised.

3.       Inventories:
         -----------

         Inventories consist of the following components (in thousands):
<TABLE>
<CAPTION>

                                                  December 30, 2006           June 30, 2006
                                              -----------------------   -----------------------
<S>                                           <C>                       <C>
Raw materials                                 $                    13   $                   692
Work in process                                                    --                        49

Finished Goods                                                 10,133                     6,439
                                              -----------------------   -----------------------
                                              $                10,146   $                 7,180
                                              -----------------------   -----------------------
</TABLE>

                                       7
<PAGE>

4.       Repurchase of Common Stock:
         ---------------------------

         The Company previously announced that the Board of Directors authorized
the repurchase by the Company of up to 350,000 shares of the Company's Common
Stock. On September 27, 2006 the Board of Directors authorized an increase in
the Company's Common Stock repurchase program of an additional 125,000 shares.
Purchases may be made from time to time in the open market and through privately
negotiated transactions, subject to general market and other conditions. The
Company generally finances these repurchases from its own funds from operations
and/or from its bank credit facility. For the three and six-month periods ended
December 31, 2006, the Company purchased 6,548 shares of its Common Stock in
connection with this repurchase program at a cost of approximately $55,000. As
of December 31, 2006, the Company has purchased a total of 309,169 shares of its
Common Stock at a cost of approximately $1,517,000 in connection with the
repurchase program.

5.       Financing Agreements:
         ---------------------

         In September 2006, the Company amended its existing bank credit
facility. The amended facility, which expires December 1, 2008, provides for
short-term loans and the issuance of letters of credit in an aggregate amount
not to exceed $50,000,000. Based on a borrowing formula, the Company may borrow
up to $30,000,000 in short-term loans and up to $50,000,000 including letters of
credit. The borrowing formula allows for an additional amount of borrowing
during the Company's peak borrowing season from June to October. Substantially
all of the Company's assets are pledged to the bank as collateral (except for
the West New York, New Jersey facility, which has been separately mortgaged as
noted below). The line of credit requires that the Company maintain a minimum
tangible net worth, as defined, and imposes certain debt to equity ratio
requirements. The Company was in compliance with all applicable financial
covenants as of December 31, 2006. As of December 31, 2006, borrowing on the
short-term line of credit was $9,380,000, and at that date the Company had
$13,808,000 of additional availability (based on the borrowing formula) under
the credit facility. At December 31, 2006 the Company was contingently obligated
on open letters of credit with an aggregate face amount of approximately
$11,413,000. Borrowing during the quarter was at the bank's prime rate or below,
at the option of the Company. The bank's prime rate at December 31, 2006 was
8.25%.

         In August 2002, the Company consummated a mortgage loan with a bank
lender in the amount of $3,250,000. The financing is secured by a mortgage of
the Company's West New York, New Jersey headquarters and warehouse facility. The
loan bears interest at a fixed rate of 7% per annum. The financing has a
fifteen-year term, but is callable by the bank lender at any time after
September 1, 2007 and may be prepaid by the Company, along with a prepayment
fee, from time to time during the term of the financing. The balance of the
mortgage as of December 31, 2006 is approximately $2,647,000.

6.       Contractual Obligations and Commercial Commitments:
         ---------------------------------------------------

         The Company leases office facilities under non-cancelable operating
leases that expire in various years through the year ended June 30, 2011.

                                       8
<PAGE>

         Future minimum payments under non-cancelable operating leases with
initial or remaining terms of one year or more are as follows:


                          Year Ended         Office and Showroom
                           June 30,             Facilities
                           --------             ----------
                             2007                $493,000
                             2008                 932,000
                             2009                 680,000
                             2010                 196,000
                             2011                  41,000


         The Company has entered into licensing arrangements with several
companies. The Company is obligated, in certain instances, to pay minimum
royalties over the term of the licensing agreements which expire in various
years through 2008. Aggregate minimum royalty commitments by fiscal year are as
follows:

                          Year Ended              Minimum
                           June 30,          Royalty Commitments
                           --------          -------------------
                             2007                $102,000

                             2008                 119,000

         From time to time, the Company and its subsidiaries may become a party
to legal proceedings, which arise in the normal course of business. At December
31, 2006, there were no material pending legal proceedings to which the Company
was a party.

         The Company has not provided any financial guarantees as of December
31, 2006.

7.       Retirement Plan:
         ---------------

         The Company had a trusteed, defined-benefit pension plan, covering
certain of its salaried and hourly employees, which was terminated effective
January 31, 2006. The pension plan had provided for pension benefits that were
based on a fixed amount of compensation per year of service, career average pay
or on the employee's compensation during a specified number of years before
retirement. In December 2006, the Company received a favorable determination
letter that permits the Company to begin to calculate and to make a final
settlement distribution to the pension plan participants. The final settlement
distribution will be made sometime during the second half of the Company's 2007

                                       9
<PAGE>

fiscal year. At the time of the settlement distribution, the Company will be
required to record a charge to earnings before income taxes of approximately
$3,091,000, consisting of a non-cash charge of approximately $2,187,000 of
non-cash, prepaid pension costs, plus a final cash contribution to fully fund
the pension plan totaling approximately $904,000.
<TABLE>
<CAPTION>

        Pension expenses includes the following components:

                                                  Three Month Period Ended       Six Month Period Ended
                                                         December 31,                  December 31,
                                                     2006           2005           2006           2005
                                                 ------------   ------------   ------------   ------------
<S>                                              <C>            <C>            <C>            <C>
COMPONENTS OF NET PERIODIC BENEFIT
COST:
    Service cost                                 $         --   $    137,747   $         --   $    268,494
    Interest cost                                      85,800         82,214        171,600        164,029
    Expected return on assets                         (83,135)       (79,203)      (166,270)      (158,406)
    Amortization of prior service cost                     --             12             --             24
    Amortization of actuarial loss                     41,835         61,629         83,670        123,258
                                                 ---------------------------------------------------------
    Net periodic cost                            $     44,500   $    202,399   $     89,000   $    397,399
                                                 =========================================================
</TABLE>

         As of December 31, 2006, no contribution has been made. However, the
Company anticipates making this contribution (approximately $904,000) during the
second half of fiscal 2007.


Recently Issued Accounting Standards:

         In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No.
108, "Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." SAB No. 108 requires that
registrants quantify errors using both a balance sheet and income statement
approach and evaluate whether either approach results in a misstated amount
that, when all relevant quantitative and qualitative factors are considered, is
material. SAB No. 108 is effective for the Company's fourth quarter of 2007. The
Company is currently evaluating the impact of adopting SAB No. 108, if any, on
its consolidated financial statements.

         In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements", which defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. The statement
is effective for fiscal years beginning after November 15, 2007. The Company
does not expect the adoption of SFAS No. 158 to have a material impact on its
consolidated financial statements.

         In September 2006, the FASB issued SFAS No. 158, "Employer's Accounting
for Defined Benefit Pension and Other Postretirement Plans - an amendment of
FASB Statements No. 87, 88, 106 and 132(R)." SFAS No.158 requires an employer to

                                       10
<PAGE>

recognize the over-funded or under-funded status of defined benefit and retiree
medical plans as an asset or liability in its statement of financial position
and to recognize through comprehensive income changes in that funded status in
the year in which they occur. Based on a preliminary evaluation, the Company
does not expect the adoption of SFAS No. 158 to have a material impact on its
consolidated financial statements.

         In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes," which clarifies the accounting for uncertainty
in income taxes recognized in the financial statements in accordance with FASB
No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosures and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact of this
standard, if any, on its consolidated financial statements.

                                       11
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------

Overview

         The Company and its subsidiaries are engaged in the design,
manufacture, distribution and sale of women's and children's apparel, and fabric
handbags, sport bags, backpacks, cosmetic bags, and related products. Our
apparel lines include women's loungewear, sleepwear, dresses and sportswear, and
lingerie, as well as infants' and children's clothing. Our products are, for the
most part, made to order, marketed and sold to a range of retailers; primarily
national mass merchandisers.

         Our business is subject to substantial seasonal variations. In that
regard, our net sales and net earnings generally have been higher during the
period from June to November (which includes our first fiscal quarter and a
portion of our second and fourth fiscal quarters) coinciding with sales to our
customers for back-to-school and holiday shopping, while net sales and net
earnings for the other months of our fiscal year are typically lower due, in
part, to the traditional slowdown by our customers immediately following the
winter holiday season. Accordingly, any significant decrease in back-to-school
and winter holiday shopping could have a material adverse effect on our
financial condition and results of operations. We expect that trend to continue
during fiscal 2007. The Company believes this seasonality is consistent with the
general pattern associated with sales to the retail industry. The Company's
quarterly results of operations may also fluctuate significantly as a result of
a number of other factors, including the timing of shipments to customers and
economic conditions. Accordingly, comparisons between quarters may not
necessarily be meaningful, and the results for any one quarter are not
necessarily indicative of future quarterly results or of full-year performance.

Critical Accounting Policies and Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the appropriate
application of certain accounting policies, many of which require us to make
estimates and assumptions about future events and their impact on amounts
reported in our financial statements and related notes. We believe the
application of our accounting policies, and the estimates inherently required
therein, are reasonable. These accounting policies and estimates are
periodically evaluated for continued reasonableness, and adjustments are made
when facts and circumstances dictate a change. However, since future events and
their impact cannot be determined with certainty, actual results may differ from
our estimates, and such differences could be material to the consolidated
financial statements. Historically, we have found our application of accounting
policies to be appropriate, and actual results have not differed materially from
those determined using necessary estimates. A summary of our significant
accounting policies and a description of accounting policies that we believe are
most critical may be found in our Management's Discussion and Analysis of
Financial Condition and Results of Operations included in our Annual Report on
Form 10-K for the year ended June 30, 2006, which we filed with the Securities
and Exchange Commission on September 28, 2006.

                                       12
<PAGE>

Liquidity and Capital Resources

         The Company's cash and cash equivalents decreased $549,000 during the
six-month period ended December 31, 2006 to $383,000 from $932,000 at June 30,
2006.

         Net cash provided by operating activities totaled $2,888,000, primarily
from an increase in accounts payable and other current liabilities of
$3,986,000, and net earnings totaling $2,179,000, offset by an increase in
inventory levels totaling $2,966,000 to meet anticipated third quarter shipping
requirements, and an increase in accounts receivable totaling $694,000.

         Funds used in financing activities of $931,000 were mostly the result
of a net decrease totaling $805,000 in borrowing under the Company's bank line
of credit, the payment of long-term debt totaling $81,000, and $55,000 used to
repurchase 6,548 shares of the Company's Common Stock.

         Net cash used in investing activities of $2,506,000 primarily reflects
the $2,200,000 mortgage receivable and $200,000 option deposit given with
respect to the new executive office building, and other property and equipment
purchases totaling $85,000.

         In September 2006, the Company amended its existing bank credit
facility. The amended facility, which expires December 1, 2008, provides for
short-term loans and the issuance of letters of credit in an aggregate amount
not to exceed $50,000,000. Based on a borrowing formula, the Company may borrow
up to $30,000,000 in short-term loans and up to $50,000,000 including letters of
credit. The borrowing formula allows for an additional amount of borrowing
during the Company's peak borrowing season from June to October. Substantially
all of the Company's assets are pledged to the bank as collateral (except for
the West New York, New Jersey facility, which has been separately mortgaged as
noted below). The line of credit requires that the Company maintain a minimum
tangible net worth, as defined, and imposes certain debt to equity ratio
requirements. The Company was in compliance with all applicable financial
covenants as of December 31, 2006. As of December 31, 2006, borrowing on the
short-term line of credit was $9,380,000, and at that date the Company had
$13,808,000 of additional availability (based on the borrowing formula) under
the credit facility. At December 31, 2006 the Company was contingently obligated
on open letters of credit with an aggregate face amount of approximately
$11,413,000. Borrowing during the quarter was at the bank's prime rate or below,
at the option of the Company. The bank's prime rate at December 31, 2006 was
8.25%.

         In August 2002, the Company consummated a mortgage loan with a bank
lender in the amount of $3,250,000. The financing is secured by a mortgage of
the Company's West New York, New Jersey headquarters and warehouse facility. The
loan bears interest at a fixed rate of 7% per annum. The financing has a
fifteen-year term, but is callable by the bank lender at any time after
September 1, 2007 and may be prepaid by the Company, along with a prepayment
fee, from time to time during the term of the financing. The balance of the
mortgage as of December 31, 2006 is approximately $2,647,000.

                                       13
<PAGE>

         As previously announced, the Company entered into an Option Contract of
Sale dated as of September 7, 2005, as amended, relating to the sale of the
Company's executive offices and warehouse facility, as well as two adjacent
lots, located in West New York, New Jersey. The proposed purchase price is
$8,800,000, subject to an increase based on additional factors. The substantial
portion of the purchase price is payable at closing. The proposed transaction is
subject to a number of contingencies and conditions, including certain
governmental approvals, the optionee's receipt of a mortgage commitment, the
completion of environmental testing and compliance, and other contingencies and
conditions.

         The Company had a trusteed, defined-benefit pension plan, covering
certain of its salaried and hourly employees, which was terminated effective
January 31, 2006. The pension plan had provided for pension benefits that were
based on a fixed amount of compensation per year of service, career average pay
or on the employee's compensation during a specified number of years before
retirement. In December 2006, the Company received a favorable determination
letter that permits the Company to begin to calculate and to make a final
settlement distribution to the pension plan participants. The final settlement
distribution will be made sometime during the second half of the Company's 2007
fiscal year. At the time of settlement, the Company will be required to record a
charge to earnings before income taxes of approximately $3,091,000, consisting
of a final cash payment of approximately $904,000 to fully fund the pension
plan, and a non-cash charge of approximately $2,187,000 consisting of prepaid
pension costs. Beginning in fiscal 2007, the Company established a new 401(k)
benefit plan for certain of its salaried and hourly employees which is expected
to have a lower employee benefit cost than the terminated pension plan.

         The Company believes that funds provided by operations, existing
working capital, and the Company's bank line of credit and mortgage financing
will be sufficient to meet anticipated working capital needs for the next twelve
months.

         There were no material commitments for capital expenditures at December
31, 2006.

         The Company previously announced that the Board of Directors authorized
the repurchase by the Company of up to 350,000 shares of the Company's Common
Stock. On September 27, 2006 the Board of Directors authorized an increase in
the Company's Common Stock repurchase program of an additional 125,000 shares.
Purchases may be made from time to time in the open market and through privately
negotiated transactions, subject to general market and other conditions. The
Company generally finances these repurchases from its own funds from operations
and/or from its bank credit facility. For the three and six-month periods ended
December 31, 2006, the Company purchased 6,548 shares of its Common Stock under
this repurchase program. As of December 31, 2006, the Company purchased a total
of 309,169 shares of its Common Stock at a cost of approximately $1,517,000 in
connection with the repurchase program.

                                       14
<PAGE>

Contractual Obligations and Commercial Commitments

         To facilitate an understanding of our contractual obligations and
commercial commitments, the following data is provided as of December 31, 2006:
<TABLE>
<CAPTION>

                     * * * * Payments Due by Period * * * *


Contractual Obligations                           Less than 1                                  More than
                                      Total           Year       1-3 Years       3-5 Years      5 Years
                                  ------------   ------------   ------------   ------------   ------------
<S>                               <C>            <C>            <C>            <C>            <C>
Notes Payable                     $  9,380,000   $  9,380,000   $         --   $         --   $         --

Mortgage Payable                     2,647,000        171,000        322,000        366,000      1,788,000

Royalties                              221,000        102,000        119,000             --

Operating Leases                     2,342,000        493,000      1,808,000         41,000             --
                                  ------------------------------------------------------------------------

Total Contractual Obligations     $ 14,590,000   $ 10,146,000   $  2,249,000   $    407,000   $  1,788,000
                                  ------------------------------------------------------------------------
<CAPTION>

Other Commercial Commitments         Total        Less than                                    More than
                                  Commitments       1 Year       1-3 Years       3-5 Years      5 Years
                                  ------------   ------------   ------------   ------------   ------------
<S>                               <C>            <C>            <C>            <C>            <C>
Letters of Credit                 $ 11,413,000   $ 11,413,000             --             --             --
                                  ------------   ------------

Total Commercial Commitments      $ 11,413,000   $ 11,413,000             --             --             --
                                  ------------   ------------
</TABLE>

Off-Balance Sheet Arrangements

         Except as described below, the Company has not created, and is not a
party to, any special-purpose or off-balance sheet entities for the purpose of
raising capital, incurring debt or operating the Company's business. The Company
does not have any arrangements or relationships with entities that are not
consolidated into the financial statements that are reasonably likely to
materially affect the Company's liquidity or the availability of capital
resources.

         On August 22, 2006, the Company entered into a lease agreement for a
new corporate office building, and plans to relocate the Company's executive
offices from West New York, NJ to Maywood, New Jersey during fiscal 2007. The
lease has a 10-year term, and grants to the Company an option to purchase the
building at any time during the term of the lease at a purchase price not to
exceed $3,075,000, plus increases based on a multiple of the consumer price
index. The lessor, 195 Spring Valley Associates, LLC, (the "Lessor"), purchased
the corporate office building at a closing, which also took place in August
2006. The Company provided the Lessor with $2,200,000 in mortgage financing,
secured by a first priority mortgage in favor of the Company on the land, office

                                       15
<PAGE>

building, and other customary rights of the mortgagor. The Company placed a
deposit with the Lessor in the amount of $200,000 in connection with the option
to purchase the property. For accounting purposes, the Company determined that
the Lessor is a variable interest entity and the Company is its primary
beneficiary as defined by FASB Interpretation No. 46(R), "Consolidation of
Variable Interest Entities" ("FIN 46(R)"). Accordingly, the financial statements
of the Lessor were consolidated with those of the Company.


RESULTS OF OPERATIONS

         Net sales were $47,584,000 and $88,208,000 during the three and
six-month periods ended December 31, 2006, compared to $35,514,000 and
$64,762,000 in the same three and six-month periods during fiscal 2006. For the
three and six-month periods ended December 31, 2006, the Handbag category net
sales were higher by 48% and 49.3%, respectively, while net sales in the Apparel
category rose 29% and 30.1%, respectively, in each case compared to last year's
three and six-month period net sales. Overall lower gross profit margins in the
three and six-month periods did not offset the increase in net sales and
resulted in improved gross profit dollar contributions in both periods ended
December 31, 2006, compared to last year's comparable periods.

         Sales by category were as follows:

         Net sales for the Apparel category were $33,848,000 for the three-month
period ended December 31, 2006, or $7,615,000 higher than the prior fiscal
comparable three month period. This 29% increase was primarily due to a 46.4%
increase in our children's apparel division, due to expanded programs with one
customer as a result of recent strong performance of our product offerings at
retail, and additional business from our "Messages from the Heart" license, as
well as a 15.3% increase in net sales in the women's sleepwear division due to
additional business with a new customer.

         For the six-month period ended December 31, 2006, net sales for the
Apparel category were $57,621,000, or 30.1% higher than the prior fiscal year's
same period due to increases in our children's apparel and women's sleepwear
businesses for the same reasons described above.

         Net sales totaling $13,736,000 for the Handbags category in the second
quarter of fiscal 2007 represented a 48% increase compared to $9,281,000 in net
sales for the same quarter in fiscal 2006. The second quarter net sales increase
primarily reflected higher sales in the premium incentive business (up 65.1%)
due to expanded programs for one of its significant customers. In addition, net
sales were 14.2% higher in the handbag business for the second quarter versus
last year's second quarter due to additional floor space given to our product
line by a significant customer which resulted from a good prior season
sell-through, in addition to a promotional item sold to that customer.

         For the six-month period ended December 31, 2006, net sales for the
Handbags category were $30,587,000, an improvement of $10,105,000, or 49.3% over
the prior comparable six-month period. About 53% of the net sales dollar

                                       16
<PAGE>

increase relates to increased premium incentive business for the reasons given
above.

         Gross margins were 24.9% and 23.1% in the three-month and six-month
periods ended December 31, 2006, compared to 26.8% and 24.9% in the comparable
periods ended December 31, 2005. Gross margins by category were as follows:

         Gross margin for the Apparel category decreased to 27.4% in the
three-month period ended December 31, 2006 from 30.9% in the second quarter of
fiscal 2006. The 3.5 percentage point decrease was primarily the result of lower
margins in the women's sleepwear division margins attributable to product mix.
For the six-month period ended December 31, 2006, gross margin for the Apparel
category decreased to 26.9% from 29.1% in the prior comparable period primarily
for the same reason.

         Gross margin for the Handbags category in the second quarter of fiscal
2007 improved to 18.7% from 15.1% in the second quarter of fiscal 2006. This
increase was mainly due to somewhat higher premium incentive business margins
attributable to several new programs, as well as higher handbag margins due to
product mix. For the six-month period ended December 31, 2006, the Handbags
category increased slightly to 15.9% (from 15.8% in the prior comparable period)
attributable to a 1.4 percentage point increase in handbag business margins due
to product mix, not offset by slightly lower premium incentive business gross
margins.

         As a percentage of net sales, shipping, selling and administrative
expenses decreased to 18.2% for the three-month period ended December 31, 2006
from 21.4% for the three-month period ended December 31, 2005. However,
shipping, selling and administrative expenses increased by $1,035,000 in the
second quarter of fiscal 2007 compared to the prior year comparable period,
mainly due to higher sales commission costs totaling $478,000 relating to
increased sales volume in this year's second fiscal quarter, higher royalty
expense totaling $25,000 related to an increase in licensed product sales in
this fiscal quarter, and certain minimum royalty commitments which were not met
and had to be expensed. In addition, the Company experienced higher product
development costs of $278,000 for both the children's apparel and premium
business relating to potential additional future business, and a $304,000
increase in general and administrative costs, principally due to higher
compensation costs, not completely offset by lower shipping and warehousing
expense totaling $33,000 relating mostly to utilizing lower cost outside
distribution providers. Shipping, selling and administrative expenses for the
six-month period ended December 31, 2006 also decreased as a percentage of net
sales (18.2% of net sales compared with 21.3% of net sales in the same period in
fiscal 2006, but were $16,017,000 for the period, or $2,216,000 higher than the
same six-month period in the prior fiscal same quarter, which totaled
$13,801,000. The increase was primarily attributable to higher sales commissions
totaling $881,000 relating to the higher sales volume, higher product
development costs of $522,000 to support the increase in sales and costs
relating to potential future business, a $432,000 increase in general and
administrative costs for higher compensation related expenses, increased royalty
expense totaling $223,000 for certain minimum royalty commitments which were not
met and had to be expensed, and increased shipping and warehouse costs totaling
$169,000 related to the higher level of sales volume in this year's first six
month period ended December 31, 2006 compared to the same six months last year.

                                       17
<PAGE>

         Interest expense of $369,000 in the second quarter of fiscal 2007
compares to $237,000 in the prior comparable quarter. For the six-month period
ended December 31, 2006, interest expense totaled $716,000 versus $377,000. Both
increases are primarily the result of a higher level of average borrowing to
finance higher sales volume, as well as about a one percent average borrowing
cost increase in the current periods.

         The increase in earnings before income taxes of $1,153,000 and
$1,647,000 for the three and six-month periods ended December 31, 2006,
respectively, compared to fiscal 2005 fiscal second quarter and six-month
periods was primarily due to much higher net sales and gross profit dollars, not
fully offset by higher shipping, selling and administrative expenses, and
interest expense, as discussed above.

         For the six-month period ended December 31, 2006, the Company's lower
effective tax rate of 39.6% compared to 45.1 % in the first six-month period of
the prior year, is primarily attributable to the impact on the effective tax
rate of the expected 2007 fiscal year earnings, excluding the settlement of the
pension plan referred to above. The Company expects the effective rate for the
full year to increase significantly due primarily to the effect of the pension
settlement and resulting earnings charge discussed above, and the Company's
inability to utilize certain net operating loss carry-forwards and other tax
benefits.

         Net earnings increased $785,000 and $1,102,000 for the three and
six-month periods ended December 31, 2006, respectively, from the prior
comparable periods. The Company expects, however, that the combination of the
charge to earnings relating to the pension settlement in the second half of
fiscal 2007, and the resulting increase in income taxes will have a material
adverse effect on the Company's net earnings for the 2007 full fiscal year.


RECENTLY ISSUED ACCOUNTING STANDARDS

         In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No.
108, "Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." SAB No. 108 requires that
registrants quantify errors using both a balance sheet and income statement
approach and evaluate whether either approach results in a misstated amount
that, when all relevant quantitative and qualitative factors are considered, is
material. SAB No. 108 is effective for the Company's fourth quarter of 2007. The
Company is currently evaluating the impact of adopting SAB No. 108, if any, on
its consolidated financial statements.

         In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements", which defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. The statement
is effective for fiscal years beginning after November 15, 2007. The Company
does not expect the adoption of SFAS No. 158 to have a material impact on its
consolidated financial statements.

         In September 2006, the FASB issued SFAS No. 158, "Employer's Accounting
for Defined Benefit Pension and Other Postretirement Plans - an amendment of
FASB Statements No. 87, 88, 106 and 132(R)." SFAS No.158 requires an employer to

                                       18
<PAGE>

recognize the over-funded or under-funded status of defined benefit and retiree
medical plans as an asset or liability in its statement of financial position
and to recognize through comprehensive income changes in that funded status in
the year in which they occur. Based on a preliminary evaluation, the Company
does not expect the adoption of SFAS No. 158 to have a material impact on its
consolidated financial statements.

         In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes," which clarifies the accounting for uncertainty
in income taxes recognized in the financial statements in accordance with FASB
No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosures and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact of this
standard, if any, on its consolidated financial statements.

SEASONALITY

         The Company's business is subject to substantial seasonal variations.
In that regard, our net sales and net earnings generally have been higher during
the period from June to November (which includes our first fiscal quarter and a
portion of our second and fourth fiscal quarters) coinciding with sales to our
customers for back-to-school and holiday shopping, while net sales and net
earnings for the other months of our fiscal year are typically lower due, in
part, to the traditional slowdown by our customers immediately following the
winter holiday season. Accordingly, any significant decrease in back-to-school
and winter holiday shopping could have a material adverse effect on our
financial condition and results of operations. The Company's quarterly results
of operations may also fluctuate significantly as a result of a variety of other
factors, including, among other things, the timing of shipments to customers and
economic conditions. The Company believes this is the general pattern associated
with its sales to the retail industry and expects this pattern will continue in
the future. Consequently, comparisons between quarters are not necessarily
meaningful and the results for any quarter are not necessarily indicative of
future results.

FORWARD-LOOKING STATEMENTS

         This Form 10-Q may contain forward-looking statements that are being
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The Company's actual performance and results may vary as a
result of a number of risks, uncertainties and other factors, both foreseen and
unforeseen, including general economic and business conditions, competition in
the accessories and apparel markets, continuing favorable sales patterns,
pricing and consumer buying trends. Additional uncertainty exists for the
potential negative impact that Severe Acute Respiratory Syndrome (SARS) may have
on our business, as it relates to our production in the Far East and other
countries in which we operate.

                                       19
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

         There have been no material changes in the information set forth under
the caption "Item 7A-Quantitative and Qualitative Disclosures About Market Risk"
in the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2006.

Item 4.  Controls and Procedures.

         At the end of the period covered by this report, the Company carried
out an evaluation, with the participation of management of the Company,
including the Company's Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on the Company's evaluation, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective. There was no change in the
Company's internal control over financial reporting during the quarter ended
December 31, 2006 that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

                                    PART II.

                                OTHER INFORMATION

Item 1A. Risk Factors.

There were no material changes from the risk factors previously disclosed in our
Annual Report on Form 10-K for the fiscal year ended June 30, 2006.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

         (a)      During the three-month period ended December 31, 2006, the
Company issued 2,000 shares of its common stock, $1.00 par value per share
("Common Stock"), upon the exercise of stock options previously granted under a
stockholder approval stock option plan of the Company. The Company received
$10,250 in cash from the individual exercising the options (the "Optionee") in
payment of the exercise price for the issued shares.

         The Company is relying on an exemption from registration contained in
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
in connection with the issuance of the shares of Common Stock. The Optionee has
represented, warranted and agreed, among other things, that the shares of Common
Stock issued upon the exercise of the applicable options have been acquired for
his own account, for investment only and not with a view to the resale or
distribution thereof; and understands that the shares of Common Stock must be
held indefinitely unless the sale or other transfer thereof is subsequently
registered under the Securities Act or an exemption from such registration is
available at that time. The Optionee has also represented that he has knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of his investment in the shares of Common Stock;

                                       20
<PAGE>

has adequate means of providing for his current needs and possible future
contingencies; is able to bear the economic risks of his investment in the
shares of Common Stock; is able to hold the shares of Common Stock for an
indefinite period of time and has a sufficient net worth to sustain a loss of
his investment in the shares of Common Stock in the event any loss should occur,
and has had access to and received such documents and information concerning the
Company as he has requested. A Securities Act restrictive legend is placed on
each certificate representing the shares of Common Stock and stop transfer
instructions are placed on such certificates as may be necessary or appropriate
to, among other things, prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act and any applicable state
securities laws.

         (b)      Not Applicable.

         (c)      Issuer Purchases of Equity Securities.

         The following sets forth certain information with respect to purchases
by the Company of shares of Common Stock during the three months ended December
31, 2006:
<TABLE>
<CAPTION>

                                                                                         Maximum Number
                                                                    Total Number of      of Shares that
                                                                   Shares Purchased as      May Yet Be
                                  Total            Average          Part Of Publicly     Purchased Under
    Period                  Number of Shares     Price Paid        Announced Plans Or     the Plans or
                                Purchased         per Share            Programs(1)          Programs
                          -------------------------------------------------------------------------------
<S>                                <C>                <C>                 <C>                <C>
October 1, 2006-
October 31, 2006                  6,540              $8.35               6,540              165,839

November 1, 2006-
November 30, 2006                    --                 --                  --              165,839

December 1, 2006-
December 31, 2006                     8              $9.45                   8              165,831
                          -------------------------------------------------------------------------------
        Total                     6,548              $8.46               6,548              165,831
</TABLE>

(1)  In December 2002, the Company publicly announced that the Board of
     Directors authorized the repurchase of up to 350,000 shares of Common
     Stock. On September 27, 2006 the Board of Directors authorized an increase
     in the Company's Common Stock repurchase program of an additional 125,000
     shares. Purchases may be made from time to time in the open market and
     through privately negotiated transactions, subject to general market and
     other conditions. The Company generally finances these repurchases from its
     own funds from operations and/or from its bank credit facility. Reference
     is made to "Management's Discussion and Analysis of Financial Condition and
     Results of Operations" and to Note 4 of the Notes to Consolidated Unaudited
     Financial Statements on page 8 of this Form 10-Q for additional information
     about repurchases of shares of Common Stock.

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

         (a)      The 2006 Annual Meeting of Stockholders of the Company (the
         "Annual Meeting") was held on November 29, 2006.

                                       21
<PAGE>

         (b)      See item 4 (c)(i) below.

         (c)      The following matters were voted on at the Annual Meeting:

         (i)      The election of nine directors to serve until the next annual
                  meeting of stockholders and the election and qualification of
                  their respective successors:

                                  Votes For         Authority to
         Name of Director         Election         Vote Withheld
         ----------------         ----------       -------------

         Abe Ginsburg             1,850,420            198,982

         Allan Ginsburg           1,850,420            198,982

         Robert Chestnov          1,847,020            202,382

         Howard Ginsburg          1,852,172            197,230

         Martin Brody             1,844,183            205,219

         Richard Chestnov         1,870,307            179,095

         Albert Safer             2,033,621             15,781

         Norman Axelrod           2,034,907             14,495

         Harold Schechter         2,033,155             16,247

         (ii)     The ratification of the appointment of Deloitte & Touche LLP
                  as independent accountants of the Company.


     Votes For:  2,041,549    Votes Against:  6,650    Abstentions:  1,203


         There were no broker non-votes as to any matter voted upon at the
         Annual Meeting.


Item 6.  Exhibits.

Exhibit No.       Description
-----------       -----------

31(a)             Rule 13a-14(a) Certification of Robert Chestnov, President and
                  Chief Executive Officer of the Company.

31(b)             Rule 13a-14(a) Certification of Anthony Christon, Principal
                  Financial Officer of the Company.

32                Certification Pursuant to 18 U.S.C. Section 1850, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       22
<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.


                                       JACLYN, INC.
                                       ------------
                                       (Registrant)


February 14, 2007                      /s/ ALLAN GINSBURG
                                       -----------------------------------------
                                       Allan Ginsburg
                                       Chairman of the Board


February 14, 2007                      /s/ ANTHONY CHRISTON
                                       -----------------------------------------
                                       Anthony Christon
                                       Vice President
                                       Chief Financial Officer

                                       23
<PAGE>

                                  EXHIBIT INDEX


Exhibit No.       Description
-----------       -----------

31(a)             Rule 13a-14(a) Certification of Robert Chestnov, President and
                  Chief Executive Officer of the Company.

31(b)             Rule 13a-14(a) Certification of Anthony Christon, Principal
                  Financial Officer of the Company.

32                Certification Pursuant to 18 U.S.C. Section 1850, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                      24