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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------


                                    FORM 10-K


              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED NOVEMBER 2, 1996
                         COMMISSION FILE NUMBER 1-11722

                               CHIC BY H.I.S, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                DELAWARE                               13-3494627
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)
                                                 
    1372 BROADWAY, NEW YORK, NEW YORK                     10018
(Address of principal executive offices)               (Zip Code)
                                           
       Registrant's telephone number, including area code: (212) 302-6400

           Securities registered pursuant to Section 12(b) of the Act:

                                          NAME OF EACH EXCHANGE ON
        TITLE OF EACH CLASS                  ON WHICH REGISTERED

           Common Stock                 New York Stock Exchange, Inc.
          $0.01 par value

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

        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 the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  x   No
                                             -----   -----

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

        As of January 21, 1997, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $47,214,492 based
upon the closing market price of a share of Common Stock on the New York Stock
Exchange as reported by the Wall Street Journal.

        As of January 21, 1997, the registrant had 9,753,868 shares of Common
Stock outstanding.



                       DOCUMENTS INCORPORATED BY REFERENCE

        (1) Portions of the registrant's Annual Report to Stockholders for the
fiscal year ended November 2, 1996 are incorporated by reference into Parts I
and II hereof.

        (2) Portions of the registrant's Proxy Statement, which has been filed 
with the Securities and Exchange Commission, for the Annual Meeting of 
Stockholders to be held on February 28, 1997 are incorporated by reference into 
Part III hereof.

                                  * * * * * * *

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Except for the historical information
contained or incorporated by reference in this filing, the matters discussed or
incorporated by reference herein are forward- looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance, or achievements of
the Company, or industry results, to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, those set forth
below under the heading "Additional Cautionary Statements" as well as the
following: general economic and business conditions; industry capacity; fashion,
apparel and other industry trends; competition; overseas expansion; the loss of
major customers; changes in demand for the Company's products; cost and
availability or raw materials; changes in business strategy or development
plans; quality of management; and availability, terms and deployment of capital.
Special attention should be paid to the forward- looking statements contained
herein including, but not limited to, statements relating to the Company's
ability to obtain sufficient financial resources to meet its capital expenditure
and working capital needs, financial risks associated with customers
experiencing financial difficulties, the benefits expected to be derived from
the restructuring and Mexican plant opening described in this report,
international expansion and competition.

ADDITIONAL CAUTIONARY STATEMENTS

        DEPENDENCE ON MAJOR CUSTOMERS. The Company's two largest customers,
Kmart Corporation ("K-Mart") and Target, a division of Dayton Hudson Corporation
("Target"), together accounted for approximately 37% and 38% of the Company's
consolidated net sales during fiscal 1995 and fiscal 1996, respectively. Each of
these customers accounted for more than ten percent of the Company's
consolidated net sales in such periods. The loss of either K-Mart or Target
could have an adverse effect on the results of the Company's operations. In
addition, several of the Company's licensees sell products bearing the Company's
trademarks to the same retailers, including K-Mart. The Company has no long-term
commitments or long-term contracts with any of its customers.



<PAGE>



        RECENT APPAREL INDUSTRY TRENDS. Competition in the apparel industry has
been exacerbated by the recent consolidations and closings of major stores. Like
many of its competitors, the Company sells to certain retailers who have
recently experienced financial difficulties and some of whom are currently
operating under the protection of the federal bankruptcy laws. Although the
Company monitors the financial condition of its customers, the Company cannot
predict what effect, if any, the financial condition of such customers will have
on the Company. The Company believes that developments to date within these
companies have not had a material adverse effect on the Company's financial
position or results of operations. Although the Company currently does not
manufacture in foreign countries for the domestic market, the Company expects to
begin manufacturing in fiscal 1997 at a plant in Mexico and, as new
opportunities arise for manufacturing in foreign countries for the domestic
market (either through subcontractors or on a direct basis), such as
opportunities presented by the North American Free Trade Agreement or changes in
international economic conditions, the Company and its competitors may avail
themselves of any advantages of manufacturing in foreign countries, which may
tend to increase competition.

        NATURE OF INDUSTRY; DEPENDENCE ON JEANS. The apparel industry is highly
competitive and characterized generally by ease of entry. Many of the Company's
competitors are substantially larger and have greater financial, marketing and
other resources than the Company. The Company's revenues are derived principally
from sales of jeans products. Although the Company's products for the domestic
market have historically been less sensitive to fashion trends than higher
fashion lines, the apparel industry is subject to rapidly changing consumer
preferences, which may have an adverse effect on the results of the Company's
operations if the Company materially misjudges such preferences.

        DEPENDENCE ON KEY PERSONNEL. The Company depends on the services of
certain key personnel, including Mr. Burton M. Rosenberg, the Chairman of the
Board and Chief Executive Officer of the Company. The Company believes that the
loss of the services of any of these key personnel could have an adverse effect
on the results of the Company's operations.

        RISKS OF DOING BUSINESS OVERSEAS. The Company's sales and earnings
attributable to its European operations have generally been increasing in recent
years and may in the future constitute a greater proportion of the Company's
sales and earnings. In general, the Company believes that the demand for jeans
in foreign markets is more susceptible to changes in fashion preferences than in
the domestic market. In addition, it is not possible to predict accurately the
effect that the continued elimination of trade barriers among members of the
European Union will have on the Company's operations in Europe. The Company is
also expanding its activities in Eastern Europe, where economic, political and
financial conditions are changing rapidly, and expects to commence manufacturing
operations in Mexico in fiscal 1997. In general, there can be no assurance that
the results of the Company's European operations or any operations in Mexico
that the Company may establish will not be adversely affected by factors such as
restrictions on transfer of funds, political instability, competition, the
relative strength of the U.S. dollar, changes in fashion preferences and general
economic conditions.



<PAGE>


        ABSENCE OF DIVIDENDS.  The Company has not, in recent years, paid any 
cash or other dividends on its Common Stock, and there can be no assurance that
the Company will pay cash dividends in the foreseeable future. As a holding
company, the ability of the Company to pay dividends is dependent upon the
receipt of dividends or other payments from its subsidiaries. The Company's
domestic credit agreements (the "Loan Agreements") contain certain limitations
on the Company's ability to pay dividends In addition, an agreement between the
Company's wholly owned German subsidiary ("Sportswear"), and one of its lenders
would prohibit Sportswear from paying dividends to the Company under certain
circumstances.

        LEVERAGE AND FINANCIAL COVENANTS. Although the Company's initial public
offering in February 1993 and the other components of its refinancing plan (the
"Refinancing Plan") improved the Company's operating and financial flexibility,
the Company continues to have indebtedness that could adversely affect its
ability to respond to changing business and economic conditions. At November 2,
1996, the Company had an aggregate of approximately $74.4 million of
indebtedness (including capital leases) outstanding and the Company's
stockholders' equity was approximately $80.9 million. In addition, the Company's
Loan Agreements contain covenants that impose certain operating and financial
restrictions on the Company. Such restrictions affect, and in many respects
limit or prohibit, among other things, the ability of the Company to incur
additional indebtedness, create liens, sell assets, engage in mergers or
acquisitions, make capital expenditures and pay dividends.



<PAGE>



                                     PART I
ITEM 1.       BUSINESS

GENERAL

         Chic by H.I.S, Inc. (the "Company") was incorporated in Delaware in
December 1988 under the name Henry I. Siegel Holding Corp. and changed its name
to Chic by H.I.S, Inc. on December 15, 1992. All references herein to the
"Company" include Chic by H.I.S, Inc. and its domestic and foreign subsidiaries
unless otherwise indicated by the context.

         The Company designs, manufactures and markets moderately priced, basic
style, cotton denim jeans, casual pants and shorts for women, girls, men and
boys, which are sold throughout the United States principally through mass
merchandisers. The Company also markets similar apparel in Europe, primarily in
Germany. In the United States, women's and girls' jeans and casual pants are
generally marketed under the CHIC(R) brand name, and men's and boys' jeans and
casual pants are generally marketed under the H.I.S(R) brand name, while in
Europe all of the Company's apparel is sold under the H.I.S brand name.

         The Company also licenses the use of its trademark, primarily the CHIC
brand name, to manufacturers of a variety of products that the Company does not
manufacture, including women's sportswear, intimate apparel, shirts,
accessories, hosiery and footwear. Many of these products are sold by the same
retailers that sell the Company's products and are generally promoted at the
retail level in a manner that complements the Company's products. In the United
States, the Company sells its apparel primarily to mass merchandisers. The
Company's marketing and advertising strategy emphasizes the quality, comfortable
fit and competitive pricing of its jeans and pants. The Company believes that
its ability to respond quickly to its domestic customers' needs, as a result of
its experienced manufacturing capabilities and its state-of-the-art ordering,
inventory and management information systems, gives it an advantage over many of
its competitors, particularly those which import finished goods. The Company's
excellence in servicing mass merchandisers has been recognized by industry-wide
awards and, in the opinion of management, is an important asset in maintaining
and broadening its business.

         Information with respect to sales, operating income and identifiable
assets attributable to each of the Company's geographic areas appears in Note 10
of Notes to Consolidated Financial Statements on page 27 of the Company's Annual
Report to Stockholders for the fiscal year ended November 2, 1996 (the "Annual
Report to Stockholders") and is incorporated herein by reference.

UNITED STATES OPERATIONS

         The effects of the United States recession, which began in fiscal 1990,
were also apparent in fiscal 1991 as United States sales decreased. United
States sales increased during fiscal 1992 primarily as a result of greater sales
to major mass merchandiser customers, which generally gained market share in the
jeans market relative to other retailers, and an improving United States
economy. During fiscal 1993, United States sales remained relatively constant.
During fiscal 1994, United States sales increased primarily due to increased
advertising. During fiscal 1995, United States sales remained relatively
constant. During fiscal 1996, United States sales decreased primarily as a
result of a shrinking market share and substantial price competition.



                                        1

<PAGE>



         In 1996, the Company made changes in advertising, marketing and
manufacturing policies. During the first and fourth quarters of fiscal 1996,
management authorized and committed the Company to undertake significant
downsizing and operational changes which, during 1996, resulted in restructuring
and special charges of $30 million.

         The charge in the first quarter included the closing of certain
manufacturing facilities in Tennessee and Kentucky. These first quarter closures
resulted in the termination of approximately 940 employees and resulted in a
total charge against earnings aggregating $15 million. In the fourth quarter,
the Company identified additional manufacturing facilities to be closed. The
Company has also started to move certain manufacturing operations to Mexico,
although as of November 2, 1996 no actual operations have begun there. The
additional closures will result in the termination of approximately 700
employees, and resulted in a total charge against earnings aggregating $15
million.

APPAREL

WOMEN'S AND GIRLS' JEANS

         The Company's principal product line is women's and girls' jeans
marketed under the CHIC and CHIC KIDS brand names, respectively, and other brand
names owned by the Company, including SUNSET BLUES(R). The Company believes that
its women's jeans were the best selling women's jeans to masS merchandisers in
the United States in 1996 based on the N.P.D. Report dated July, 1996. The
Company's jeans are available in a variety of finishes, such as prewashed and
stone washed. By altering the laundry time and ingredients used in the finishing
process, the Company is able to produce various colors and shades in denim
products.

         The Company was the originator of "proportioned to fit" jeans for
women, which it introduced in 1975. The Company's women's and girls' jeans are
designed to provide a more comfortable fit by tailoring their measurements to a
woman's or girl's height in addition to her waist size. Each size is offered for
sale in a variety of inseam lengths. Women's and girls' jeans are available in a
relaxed fit, slim fit and classic fit.

         CHIC jeans are offered in four general size categories: CHIC misses is
offered in sizes 2 to 20 in petite, average and tall lengths; CHIC juniors is
offered in sizes 1 to 15 in petite, average and tall lengths; CHIC plus is
offered in sizes 18 to 26 in petite and average lengths; and CHIC KIDS is
offered in sizes 7 to 14 for young girls.

         Currently, the Company's women's jeans are generally priced to sell at
retail for between $15.88 and $21.99, with most products priced to sell at
retail for $19.99. The Company's girls' jeans are generally priced to sell at
retail for between $14.99 and $16.99.

WOMEN'S AND GIRLS' CASUAL PANTS AND SHORTS

         The Company markets women's casual pants and shorts under the CHIC
brand name and girls' casual pants and shorts under the CHIC KIDS brand name.
The Company's casual pants are available in the same "proportioned to fit" sizes
as CHIC jeans. The Company believes that CHIC pants have the same advantages as
CHIC jeans in terms of fit, quality and value. Casual pants are generally more
fashion-oriented and are more susceptible than basic jeans to changing consumer
preferences. The Company's two primary casual pant styles, the "CHIC Spectator"
which is made of 100% cotton wrinkle resistant, and the "CHIC Schooners," which
is all-cotton, are both basic design casual pants.



                                        2

<PAGE>


         Currently, the Company's women's casual pants are generally priced to
sell at retail for between $16.99 and $21.99, with most products priced to sell
at retail for $18.99. The Company's women's casual shorts are generally priced
to sell at retail for between $12.99 and $14.99; girls' casual pants are
generally priced to sell at retail for between $13.99 and $16.99; and girls'
casual shorts are generally priced to sell at retail for between $9.99 and
$11.99.

WOMEN'S AND GIRLS' JEAN SHORTS

         The Company markets women's and girls' jean shorts under the CHIC and
CHIC KIDS brand names, respectively. Traditional five-pocket jean shorts
constitute the Company's core product in this line. The Company complements this
basic product with jean shorts that are slightly more fashion-oriented.
Currently, the Company's women's jean shorts are generally priced to sell at
retail for between $14.99 and $18.99. The Company's girls' jean shorts are
generally priced to sell at retail for between $14.99 and $17.99.

MEN'S AND BOYS' JEANS AND JEAN SHORTS AND MEN'S CASUAL PANTS AND SHORTS

         The Company markets men's and boys' jeans and jean shorts and men's
casual pants and shorts under the H.I.S brand name. The Company offers its men's
and boys' apparel in a broad range of sizes, colors, fabrics and finishes. All
of the men's and boys' five-pocket jeans manufactured by the Company are
available in two styles: a relaxed fit and a classic fit. The Company offers
men's jeans in 38 different sizes by waist and inseam length. Boys' jeans are
offered in sizes 8 to 18 in regular fit and slim fit.

         The Company's line of men's casual pants is marketed under the H.I.S
label and is available in casual, classic and basic styles that are generally
more fashion-oriented and are more susceptible than its men's or boys' jeans to
changing consumer preferences.

         Currently, the Company's men's jeans are generally priced to sell at
retail for between $16.99 and $21.99, with most products priced to sell at
retail for $19.99; boys' jeans are generally priced to sell at retail for
between $14.99 and $16.99; jean shorts are generally priced to sell at retail
for between $14.99 and $16.99; casual pants are generally priced to sell at
retail for between $17.99 and $19.99; and casual shorts are generally priced to
sell at retail for between $12.99 and $16.99.

SALES AND DISTRIBUTION

         During fiscal 1996, the Company sold its products to more than 3,000
retailers, which the Company believes operate over 16,000 stores in the United
States. The Company also started to sell merchandise in the Canadian market.
Most of the Company's sales in fiscal 1996 were made to mass merchandisers and
the remainder were made primarily to department and specialty stores. Sales of
the CHIC and H.I.S product lines to the Company's two largest accounts, Kmart
Corporation and Target, accounted for approximately 56% of United States sales.

         Sales are made primarily through the Company's full-time sales force
and also through showrooms and trade shows, with an emphasis on selling to mass
merchandisers. The Company has a direct sales force, which includes individuals
located in the Company's New York City showroom as well as showrooms in Chicago,
Dallas and other locations. The Company pays only sales commissions to its
salespeople. Although the Company pays a base salary to its regional sales
managers, a portion of the income of such managers is in the form of incentive
bonuses, traditionally based on increases in the Company's sales. Each
salesperson is equipped with a personal computer that has a direct satellite
linkup with the mainframe located in the Company's executive offices, which
allows each salesperson to access readily various types of information such as
product availability. The Company maintains its principal showroom in New York
and additional showrooms in Chicago and Dallas to service regional markets.
Each showroom is staffed by local sales representatives.



                                        3

<PAGE>


         The Company currently operates eight retail stores in Tennessee and
Kentucky that sell seconds and closeouts of CHIC and H.I.S brand merchandise,
including licensed products. At the present time, the Company does not intend to
increase significantly the number of its retail stores.

         The Company's warehouse and distribution center facility is located in
Bruceton, Tennessee. All sewn goods are shipped from the Company's eleven
assembly plants to Bruceton by the Company's own fleet of tractors and trailers
and are then washed, either at the Company's facilities or an outside launderer,
pressed, warehoused and distributed to the Company's customers throughout the
United States and Canada.

         Substantially all of the Company's sales in the United States and
Europe are to retailers. For the year ended November 2, 1996, sales to two major
customers (with sales in excess of 10% of total sales) approximated 25.5% and
12.2% of consolidated net sales on an individual basis. For the year ended
November 4, 1995, sales to two major customers approximated 23.2% and 14.0% on
an individual basis. For the year ended November 5, 1994, two major customers
accounted for approximately 22.3% and 13.1% of total sales on an individual
basis. The receivables from the two major customers at November 2, 1996
represent approximately 41.3% of the total accounts receivable balance. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The Company reviews a customer's credit history before extending
credit. An allowance for possible losses is established based upon factors
surrounding the credit risk of specific customers, historical trends and other
information.


MARKETING, ADVERTISING AND PROMOTION

         The Company advertises its products nationwide through television and
print media. The Company's advertising strategy emphasizes the quality,
comfortable fit and competitive pricing of its jeans and pants. At the national
level, the Company's advertising is image oriented. Television commercials
promote the CHIC name and are designed to create a personality for the brand.
The Company believes that such strategy has enabled CHIC to become a nationally
recognized brand name for women's apparel.

         Consumer advertising for the Company's CHIC line of products is done
primarily through network and cable television and, to a lesser extent,
magazines. National television advertisements are generally run during the fall
back-to-school, spring and Christmas selling seasons. Print advertising of the
CHIC line consists primarily of spreads in magazines oriented toward women. The
Company's advertising of its H.I.S line has been accomplished primarily through
the use of print advertising. The Company placed H.I.S advertisements in major
national magazines that generally appeal to male readers. The Company targets
women in the 18-49 age group for its CHIC brand women's products, with and
emphasis on the 18-34 age group, and targets men in the 18-49 age group for its
H.I.S brand men's products. The Company believes that consumers of its products
are generally in the moderate-income bracket.

         The Company supplements its national advertising campaign through the
use of cooperative advertising in radio and newspaper media, in which the
Company's products are among those featured by various retailers in their
advertisements. Under the Company's cooperative advertising program, which is
generally standard in the industry, the Company will pay towards approved
advertising up to two percent of the store's total purchases from the Company
during the preceding semi-annual period. In addition, the Company advertises to
retailers through print advertisements in a variety of trade magazines and
newspapers.

         The Company is seeking a larger share of the domestic mass merchandise
market for its men's and boys' jeans under the H.I.S brand name. To attain such
increase, the Company has allocated a larger portion of its total advertising
budget to the H.I.S brand.


                                        4

<PAGE>



         The Company believes that there are opportunities for increasing the
Company's share of the mass merchandise market for men's jeans in the United
States, which the Company believes is substantially larger than the market for
women's jeans. Based on its reputation as a reliable supplier of branded women's
jeans and its previous history as a manufacturer of men's jeans and other
apparel under the H.I.S brand name, the Company believes that opportunities
exist to penetrate further the mass merchandise and specialty store market for
men's jeans. The Company has begun to focus on selling men's jeans to the same
mass merchandisers and specialty stores that carry CHIC women's jeans. The
Company anticipates that there will be a positive correlation between an
increase in advertising and an increase in sales, but there can be no assurance
that the Company will realize its objective of increasing its share of the men's
and boys' jeans market, which is highly competitive and in which the Company
currently has only a limited presence.

         The Company works with retailers to provide custom displays to stores.
The Company provides to its customers, free of charge, a variety of point of
sale display materials such as signs, size markers, graphics, in-store posters,
photographs and other visual supports.

PRODUCT DESIGN

         The Company's two in-house merchandising groups develop jeans and
casual pants product lines, respectively, including the pricing and packaging
for each line. The merchandising groups interpret market trends by visiting
retail stores throughout the United States, Canada and Europe, attending trade
shows, working with textile mills and retailers and conducting market research.
The Company also researches and tests denim finishes in its Hickman laundry
facility in order to develop new wash finishes to add to the Company's product
mix.

         After the merchandising groups have researched the retail market and
domestic fabric market, consulted with the various fashion and color forecasting
services to which the Company subscribes and decided on the details to be
incorporated into the new lines, prototype samples, fit, colors and packaging
are developed in the New York office. The prototypes are then sent to the
Company's main manufacturing facility in Bruceton, Tennessee, which produces a
manufactured sample.

         In keeping with the Company's emphasis on a quality fit, the garment
has several fit evaluations using a professional fit model from prototype stage
to a finished manufactured garment. The samples produced in Tennessee are
evaluated for fit, color and finish and then sent to the sales force to display
to prospective customers. When the garment has been sold and the first
production run of garments is produced, a full size range is sent to New York
where the garment is fitted on models of various sizes to allow the
merchandisers to make any final adjustments that may be needed to improve the
fit and appearance of the new lines for different body types.

MANUFACTURING AND RAW MATERIALS

         The Company performs all phases of the manufacturing process in
converting raw materials into finished goods. The Company believes that it is
the only major manufacturer of moderately priced jeans in the United States to
purchase all of its raw materials domestically and to manufacture all of its
products in North America. Consequently, the Company enjoys a shorter lead time
in filling orders than is usually associated with competitors that rely on
imports of finished goods or offshore manufacturing processes.


                                        5

<PAGE>



         The Company currently buys finished fabric in bulk from domestic
suppliers and generally has no supply contracts with terms longer than three
months. The Company believes that through its domestic suppliers it is able to
obtain good quality materials in a timely manner at competitive prices. During
fiscal 1996, the Company purchased approximately 40.0% of its raw materials from
two suppliers, which were the only companies supplying more than 10% of the
Company's raw materials during fiscal 1996. The Company maintains a portion of
its inventories in commodity raw materials, which consist mainly of cotton
fabrics, including denim and twills. These raw materials, the Company believes,
are readily available from numerous domestic and foreign sources. Although the
Company relies heavily on certain suppliers for its raw material needs, the
Company believes that the loss of any one source of raw materials, though no
such loss is presently anticipated, would not have a material adverse effect on
its business since many other alternative, comparable sources are readily
available.

         The Company operates manufacturing facilities in Tennessee, Alabama,
Kentucky and Mississippi. The Company has purchased and is renovating a
substantial manufacturing facility in Durango, Mexico. Production from this
facility is expected to begin during the second fiscal quarter of 1997 and the
production will be used for the United States market. Concurrent with the
Company's purchase and renovation of its proposed manufacturing facility in
Durango, Mexico, the Company closed certain United States manufacturing
facilities and is currently planning to match production with demand by closing
additional United States facilities.

         With its manufacturing systems, which the Company believes are
state-of-the-art, the Company is usually capable of converting raw material into
a finished garment and delivering such garment to the retailer within three
weeks from the date the Company receives the retailer's order as compared to
importers, which the Company believes generally take eight to ten weeks from the
date of order to delivery of a finished garment to the retailer. The Company's
facilities and systems, together with exclusively domestic sourcing of fabric
and other raw materials, enable it to adapt to changing consumer preferences
quickly and to respond swiftly to customer orders. In addition, by reducing the
time needed to manufacture a finished garment, the Company is able to keep
inventory at minimal levels. By limiting inventory and avoiding many of the
shipping and warehousing costs faced by overseas importers, the Company believes
that it is currently able to offset any benefits it would derive from reduced
labor costs were it to manufacture in overseas countries for the United States
market. Although the Company currently has no plans to manufacture in overseas
countries for the domestic market, as new opportunities arise for manufacturing
in overseas countries for the domestic market (either through subcontractors or
owning facilities), the Company intends to evaluate the possible advantages and
disadvantages of manufacturing in overseas and other foreign countries.

         The Company generally cuts fabric only after receiving confirmed
purchase contracts from customers. Each contract is for a specified amount of
product at a specified price and usually provides for several preliminary,
staggered delivery dates. Customers then place specific orders for delivery
against such contract. By manufacturing in response only to a confirmed purchase
contract, the Company is able to determine its finished inventory needs in
advance of such delivery dates so as to be able to respond quickly to a
customer's order and at the same time minimize its finished inventory risk.
Occasionally, based on agreements with customers, preliminary delivery dates are
extended. The postponement of a delivery date may cause the Company to lose
sales it otherwise might have made to the customer for the period during which
delivery is eventually made. Should a delivery date be postponed, the Company is
often able to arrange with its suppliers to delay delivery of raw materials the
Company has ordered.


                                        6

<PAGE>



         The Company uses its own fleet of tractors and trailers to pick up raw
materials from its suppliers and transport such raw materials to the Company's
central manufacturing headquarters in Bruceton, Tennessee. In Bruceton, the
fabric is cut and trimmed and then shipped by the Company's fleet to one of the
Company's ten assembly plants where the garments are sewn. Assembled garments
are then sent to Hickman Laundry for laundry processing and returned to Bruceton
for final finishing and pressing.

EUROPEAN OPERATIONS

         In Europe, where mass merchandisers have limited market share, the
Company's H.I.S brand jeans are sold primarily through department stores and
mail order catalogs. Most of the Company's sales in Europe are made in Germany.
European sales in fiscal 1991 increased as a result of the new pricing strategy
and market opportunities created by German reunification. The unusually high
demand for H.I.S products created in fiscal 1991 by expansion of the German
market as a result of the reunification, however, was not duplicated in fiscal
1992 and, aggravated by a weakening German economy, resulted in decreased sales
volume. Primarily as a result of increased advertising, European sales increased
in fiscal 1993 through fiscal 1996.

         The Company markets women's and men's jeans and casual pants under the
H.I.S brand name primarily in Germany and, to a lesser extent, Austria and
Switzerland, as well as other European countries. As in the United States, the
Company's core business in Europe is basic, five-pocket denim jeans. The Company
believes that its jeans were the best selling women's jeans in Germany during
fiscal 1996.

         Prior to fiscal 1997, the Company had been licensing the H.I.S brands
for sale in the Czech Republic for the previous three years. Commencing fiscal
1997 the Company ended the licensing arrangement and is marketing its products
directly with its own contracting, sales force and distribution center.

         The Company believes that in many European countries basic jeans, such
as those manufactured by the Company, are perceived to be a fashion item as well
as a basic, functional product and are therefore worn in a broader range of
settings than in the United States, which contributes to a high level of demand
for jeans in Europe. The Company believes that approximately 50 million pairs of
women's and men's jeans are sold in Germany each year, and that approximately
one-half of such jeans sold do not bear a recognized brand name. Due to their
fashion versatility and the absence of mass merchandisers and discount
retailers, jeans are priced much higher, in relative terms, at the retail level
in Europe than in the United States.

         The Company's European headquarters are located in Garching, Germany
(outside of Munich), where the Company has its own staff of merchandising,
sales, production, management and finance personnel. The Company does not own
any manufacturing facilities in Europe, but currently has long-term agreements
with approximately thirty five manufacturers in the Czech Republic, Germany,
Greece, Italy, Malta, Portugal, Tunisia and Turkey, where the Company believes
quality products can be manufactured at competitive prices. Due to the large
number of manufacturers, the Company believes that the termination of any
existing manufacturing contract would not have a material adverse effect on its
operations. All of the raw materials used to assemble the jeans and pants are
purchased by the Company in Europe and are readily available from numerous
suppliers. Raw materials are shipped to subcontractors in foreign countries for
assembly. Finished goods are shipped by the subcontractors to the Company's
distribution center in Garching, Germany for washing, finishing, warehousing and
then shipment to the Company's customers.

                                        7

<PAGE>



         Most European customers are traditional department stores such as
Kaufhof AG, Mac Fash TextilHandels-GessellschaftmbH, Hertie Waren-und Kaufhaus
GmbH, Horten AG and specialty stores such as Leffers AG and Peek & Cloppenburg
KG in Germany. Other significant customers include German-based Otto Versand
GmbH & Co., the world's largest mail-order firm, and Quelle, Europe's largest
mail-order firm, as well as Spar Osterreichische Warenhandels-AG (Hervis
Modekaufhaus GmbH), one of the largest retail operations in Austria.

         The Company employs a merchandising staff that creates styles and
selects fabrics designed to meet the demands of the European consumer. Twenty
commissioned salespersons service approximately 2,000 retail accounts and
mail-order houses. The Company's European advertising is aimed at men and women
between the ages of 16 and 39 through television and print media.

         It is not possible to predict accurately the effect that the continued
elimination of trade barriers among members of the European Union will have on
the Company's operations in Europe. The Company considers other Western European
countries, such as the United Kingdom, France and Italy, to be extremely
competitive markets and does not anticipate that it will seek to expand sales
significantly in such countries.

CENTRAL OFFICE AND COMPUTER SYSTEM

         The Company maintains its principal executive offices in New York City
from which it provides its department managers with integrated information with
respect to inventory, production, manufacturing and distribution operations as
well as financial matters. The Company believes that it has a state-of-the-art
computer information system, substantially all of the software for which was
developed internally. This sophisticated system allows the Company's salespeople
to enter sales orders electronically. Many large customers submit their orders
directly to the Company over an electronic data interchange system via
satellite. Such linkups allow the Company to process customer orders quickly,
reducing the lead time between orders and deliveries.

         Major customers customarily place confirmed purchase contracts for a
total unit quantity by price, style and delivery date. Through point of sale
data collection devices, many of these customers monitor their sales to
consumers and report directly to the Company their over-the-counter level of
sales as well as the desired inventory levels they wish to maintain at their
individual stores. On a weekly basis the Company receives information as well as
detailed shipment orders for each of the stores of such customers. These
detailed store orders are designed to replenish the inventory levels of the
individual retail stores, which the Company is generally able to do in five to
eight business days.

         The Company also receives on a daily basis orders taken by its sales
force. These orders are electronically transmitted to the Company by members of
the sales force through their own computer terminals which are connected to the
Company's main computer system via satellite. Such orders are then
electronically reviewed for style, color, size, creditworthiness and requested
delivery dates. If the results of such reviews are satisfactory, the orders are
considered to be confirmed purchase contracts and are added to backlog.

         The computer system allows the Company to monitor production in real
time, so that the location and status of every cut and production plan in every
factory is known at any moment in time. In the highly competitive apparel
industry, the Company believes that its "just-in-time" ability to respond
quickly to customer demand gives it a significant advantage over many of its
competitors, especially with respect to mass merchandisers. 

                                        8

<PAGE>


LICENSING

         Pursuant to approximately 30 license agreements between the Company and
various manufacturers and/or importers, such licensees produce and market a
variety of products under the CHIC name and/or H.I.S name including: sportswear,
intimate apparel, accessories, hosiery and footwear. Most of these products
complement apparel products marketed by the Company.

         The Company began licensing its trademarks in fiscal 1989. Licensing
revenues have increased from approximately $0.8 million in fiscal 1990, the
first full year of licensing operations, to approximately $6.4 million in fiscal
1996.

         The current license agreements expire on various dates through 2000.
Many of the agreements, however, permit the licensee to renew its agreement,
subject to certain conditions, prior to expiration, generally for an additional
three-year period. The majority of the agreements require that licensees pay a
specified guaranteed minimum royalty to the Company at the beginning of each
quarter during the term of the licensing agreement and then pay a certain
percentage (generally five percent) of the licensee's net sales of products
bearing a trademark licensed by the Company. Such payments are due within 30
days after the end of each quarter, against which amount the guaranteed royalty
is deducted. Generally, each licensee is required to spend specified amounts for
advertising and promotion of the licensed products and most licensees offer a
matching cooperative advertising plan to retailers for advertising in weekly
circulars that are used by some retailers to advertise sale items. The Company
has received no indication from its licensees that they intend to terminate
their licensing agreement with the Company prior to its expiration.

         The Company's strategy is to identify market leaders in their
respective fields who will generate increased sales over an extended period of
time and entrench the brand names in key categories. The Company often consults
with its largest customers to identify and evaluate potentially suitable
licensees. In evaluating a potential licensee, the Company considers the
experience, financial stability, manufacturing performance and marketing ability
of the potential licensee. It also evaluates the marketability of the products
proposed to be licensed and the compatibility of such products with other
products manufactured or licensed by the Company. The Company believes that
strong consumer acceptance of the CHIC and/or H.I.S brand name and the care that
the Company uses in selecting suitable licensees have been major contributors to
the success of its licensing program.

         During the past year, the Company introduced Men's Knit and Woven
Shirts under a licensing agreement with Santana Ltd., a highly regarded importer
of Men's Shirts. The Company believes that the expansion of licensed products
under the H.I.S. name will have a significant impact on the brand's growth in
the future. The Company continues to explore opportunities to expand the H.I.S.
licensing program to other related products.

         By increasing consumer awareness of its brand names through expanded
advertising of its products, and continuing to use care in selecting suitable
licensees, the Company anticipates that it will be able to strengthen its
licensing business. As the demand for licensed products expands, competition
will increase among licensors and no assurance can be given that the Company
will be able to expand or maintain its market position with respect to various
licensed goods in the future. In addition, no assurance can be given that demand
will continue to expand.



                                        9

<PAGE>



         The Company coordinates the efforts of its licensees in a number of
ways. The Company communicates its color schemes, styling and market trends to
its licensees prior to each season, presents a coordinated in-store presentation
of proprietary and licensed products, and coordinates the advertising of the
family of CHIC and/or H.I.S. products through planned promotions.

         As a general policy matter, in the United States the Company licenses
its brand names for use only on products it does not manufacture.

COMPETITION

         The apparel industry is highly competitive and characterized generally
by ease of entry. Although the Company's products have been historically less
sensitive to fashion trends than higher fashion lines, the apparel industry is
subject to rapidly changing consumer preferences, which may have an adverse
effect on the results of the Company's operations if the Company does not
accurately judge such preferences. Among the factors that shape the competitive
environment are quality of garment construction and design, price, fit, brand
name, style and color selection, advertising and the manufacturer's ability to
respond quickly to the retailer on a national basis. Customer and consumer
acceptance and support are also important aspects of competition in this
industry. The Company believes that its ability to market its products though
its broad distribution network, which consists primarily of mass merchandisers,
is important to its ability to compete. The Company also believes that its
continued success will depend upon its ability to remain competitive in these
areas.

         The Company competes with numerous domestic and foreign manufacturers,
many of which are larger or are associated with companies with substantially
greater resources than the Company. The Company faces competition in sales on
both the retail and consumer level. In general, mass merchandisers limit their
product selection to moderately priced products. Accordingly, the Company
believes that the domestic jeans market with respect to sales to mass
merchandisers is stratified by a more narrow price range than sales to
consumers, who might be willing to buy products in a broader price range. Since
certain retailers generally carry only moderately priced products, particularly
mass merchandisers, the Company competes for sales to such retailers only with
companies that market similarly priced products.

         The Company considers its significant competitive advantages to be the
high consumer recognition and acceptance of the CHIC brand name and its ability
to respond quickly to its customers' needs as a result of the Company's
experienced manufacturing capabilities and advanced computer information system.
Although brand recognition is an important element of competition in the apparel
business, in the mass merchandising retail industry, brand recognition is less
significant in the marketing of casual pants than in the marketing of jeans.
Most mass merchandisers carry only casual pants bearing their own private label
and a limited number, if any, of other brands of casual pants. Consequently,
with respect to its mass merchandising customers, the Company's casual pants
compete with fewer brands than its jeans.

         In Germany, Austria and Switzerland, the Company competes in a higher
priced market against various European and multinational companies, including
Mustang Bekleidungswerke, manufacturer of MUSTANG brand jeans, and Levi Strauss,
manufacturer of LEVI'S brand jeans. The Company believes that its pricing
strategy in Europe, which is to position its products in the price range below
the range for Levi Strauss, along with its reputation in Europe for marketing
jeans in a variety of sizes especially suited for women, distinguishes it from
its competitors in Europe. Certain jeans suppliers, such as Levi Strauss, have
traditionally spent more than the Company on advertising in Europe. The Company
believes that increased advertising in Europe has increased the Company's market
share by attracting consumers who traditionally have bought unbranded products.


                                       10

<PAGE>




BACKLOG

         The Company's backlog consists of confirmed purchase contracts. At
November 2, 1996, the Company had unfilled customer orders of approximately
$97.9 million of merchandise, of which approximately $53.2 million were for
domestic orders and approximately $44.7 million (based on the exchange rate for
the deutsche mark on November 2, 1996) were for European orders, compared to
approximately $166.4 million at November 4, 1995, of which approximately $128.5
million were for domestic orders and approximately $37.9 million (based on the
exchange rate for the deutsche mark on November 4, 1995) were for European
orders. The Company believes that the change in backlog in the United States and
Europe is attributable largely to the performance of the Company's products in
over-the counter sales by its customers which leads to the placement of future
orders. Substantially all of the unfilled orders at November 2, 1996 are
expected to be shipped before the end of the Company's fiscal year ending
November 1, 1997. The Company believes that in the past it has shipped at least
95% of its confirmed purchase contracts. The Company has not generally
experienced difficulty in filling orders on a timely basis.

SEASONALITY

         Demand for the Company's apparel products and its level of sales
fluctuate moderately during the course of the calendar year as a result of
seasonal buying trends. A moderate surge in sales of denim jeans and casual
pants generally occurs during the fall back-to-school and Christmas holiday
selling seasons (the Company's third and fourth quarter, respectively). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Seasonality of Business-Quarterly Results." To balance these
fluctuations in demand, the Company has developed competitively priced packages
of jean shorts and casual shorts, which are sold primarily during the Company's
first and second quarters. This enables the Company to market to the year-round
apparel needs of consumers, thereby stabilizing production levels at the
Company's manufacturing facilities during traditionally slower periods.

TRADEMARKS

         Several of the Company's trademarks, including CHIC and H.I.S, are
registered in the United States Patent and Trademark Office. These registrations
expire on various dates through 2005, subject to renewal. From time to time the
Company adopts new trademarks in connection with the marketing of its products.
The Company considers its trademarks to be significant assets of the Company and
to have significant value in the marketing of its products.

         The Company has registered and filed applications for various
trademarks, including H.I.S, which is the primary trademark used by the Company
to market its products in Europe, in approximately 20 countries throughout the
world, primarily Germany, Austria and Switzerland. The Company believes that
these foreign trademarks constitute significant assets and are material to its
European marketing operations.

EMPLOYEES

         As of November 2, 1996, the Company employed approximately 3,200
full-time people in the United States, most of whom work in Tennessee. The
Company believes that it is one of the largest private employers in the State of
Tennessee. As of November 2, 1996, the Company employed approximately 150 people
in Europe.

         None of the Company's employees are represented by a union. The Company
believes that its relationship with its employees is good.

         The Company believes that all of its manufacturing facilities are in 
material compliance with applicable occupational health and safety laws.


                                       11

<PAGE>



RECENT DEVELOPMENTS - SUBSEQUENT EVENTS

         In December 1996, the Company negotiated the prepayment of the
outstanding balance of the senior notes payable of $43.0 million. The prepayment
was funded through the Company's existing revolving credit agreement.

         On January 27, 1997, the Company announced that it had retained a
managing underwriter for a proposed initial public offering that will result in
the sale by the Company of a significant minority interest in the Company's
wholly-owned German subsidiary h.i.s. sportswear GmbH headquartered in Munich.
The sale is expected to occur in the second quarter of 1997. Consummation of the
sale would be subject to market conditions, approval by the Company's Board of
Directors, receipt of a fairness opinion from the Company's financial adviser,
execution of an underwriting agreement and other definitive documentation and
satisfaction of certain legal and regulatory requirements.



                                       12

<PAGE>



ITEM 2.       PROPERTIES

         The Company owns its principal manufacturing and distribution
facilities which are located in Tennessee. The Company leases additional 
facilities, including its corporate headquarters and showrooms in New
York City, and other offices, factories, warehouses, showrooms and retail stores
in the United States, Germany, Austria and Switzerland from unrelated third
parties. The Company's principal owned and leased properties are described in
the chart below.

                      PRINCIPAL OWNED AND LEASED PROPERTIES
<TABLE>
<CAPTION>
                                                              Location          Square Footage        Owned/Leased
                                                              --------          --------------        ------------
<S>                                                         <C>                   <C>                  <C>    
North America
         Manufacturing and Assembly Facilities.........     Belmont, MS            102,900             Leased
                                                            Bruceton, TN           200,094             Owned
                                                            Bruceton, TN           150,000             Owned
                                                            Camden, TN              41,022             Owned
                                                            Durango, Mexico        108,000             Owned
                                                            Fulton, KY              17,000             Leased
                                                            Gleason,TN              53,103             Owned
                                                            Hickman, KY            280,000             Leased
                                                            Monticello, KY          58,000             Owned
                                                            Phil Campbell, AL       48,000             Leased
                                                            Saltillo, TN            48,028             Owned
                                                            South Fulton, TN        70,269             Owned
                                                            Tiptonville, TN         52,790             Owned
                                                            Trezevant, TN           42,008             Owned
         Warehouse and Distribution....................     Bruceton, TN           422,087             Owned
         Showrooms.....................................     Chicago, IL              1,242             Leased
                                                            Dallas, TX               1,325             Leased
                                                            New York, NY             8,721             Leased
         Retail Stores.................................     Bowling Green, KY        7,200             Leased
                                                            Bruceton, TN             5,500             Leased
                                                            Clarksville, IN          6,420             Leased
                                                            Cookeville, KY          11,200             Leased
                                                            Goodlettsville, TN       5,310             Leased
                                                            Louisville, KY           7,100             Leased
                                                            Murfreesboro, TN         5,200             Leased
                                                            Paducah, KY              5,000             Leased
         Machine Shop and Equipment Warehouse..........     Bruceton, TN            41,000             Owned
                                                            Bruceton, TN            12,000             Owned
         Corporate Offices.............................     New York, NY            34,034             Leased
Europe
         Office and Warehouse..........................     Prague, Czech Republic   1,534             Leased
                                                            Garching, Germany      90,000              Leased
                                                            Warsaw, Poland           8,216             Leased
         Showrooms.....................................     Bergheim, Austria        2,000             Leased
                                                            Prague, Czech Republic     347             Leased
                                                            Berlin, Germany            600             Leased
                                                            Munich, Germany          1,500             Leased
                                                            Neuss, Germany           1,100             Leased
                                                            Warsaw, Poland             137             Leased
                                                            Zurich, Switzerland        700             Leased
</TABLE>


         The Company believes that its existing facilities are well maintained,
in good operating condition and are adequate for its present level of operations
and sufficient to accommodate any increased output for the foreseeable future
after consideration of the operational changes made during fiscal 1996.



                                       13

<PAGE>




ITEM 3.       LEGAL PROCEEDINGS

         From time to time, the Company is involved in litigation incidental to
the conduct of its business. The Company believes that no currently pending
litigation to which it is a party will have a material adverse effect on its
consolidated financial condition or results of operations.

         ENVIRONMENTAL MATTERS

         The Company believes it is in material compliance with all applicable
environmental laws to which it is subject, including, among others, the Federal
Water Pollution Control Act, and the Tennessee Solid Waste Disposal Act.
Although the Company is unable to predict what legislation or regulations may be
adopted in the future with respect to environmental protection and what their
impact on the Company may be, compliance with existing legislation and
regulations has not had a material adverse effect on its capital expenditures,
results of operations or competitive position.

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

         Not applicable.





                                       14

<PAGE>




                                     PART II

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

         The information required by this item is included under the captions
"PRICE RANGE OF COMMON STOCK" and "DIVIDEND POLICY" on page 28 of the Annual
Report to Stockholders and is incorporated herein by reference.


ITEM 6.       SELECTED FINANCIAL DATA

         The information required by this item is included under the caption
"SELECTED CONSOLIDATED FINANCIAL DATA" on page 10 of the Annual Report to
Stockholders and is incorporated herein by reference.


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

         The information required by this item is included under the caption
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" on page 11 of the Annual Report to Stockholders and is incorporated
herein by reference.


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements, notes thereto, report of
independent certified public accountants thereon and quarterly financial
information (unaudited) appearing in the Annual Report to Stockholders and made
a part of the Annual Report to Stockholders are incorporated herein by
reference.

         Except as specifically set forth herein and elsewhere in this Form
10-K, no information appearing in the Annual Report to Stockholders is
incorporated by reference into this report and the Annual Report to Stockholders
shall not be deemed to be filed, as part of this report or otherwise, pursuant
to the Securities and Exchange Act of 1934.


ITEM 9.       CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

         Not Applicable.


                                       15

<PAGE>




                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this item is included under the captions
"ELECTION OF DIRECTORS" and "EXECUTIVE OFFICERS" on pages 5 through 8 of the
Company's Proxy Statement for the Annual Meeting of Stockholders to be held on
February 28,1997 (the "1997 Proxy Statement") and is incorporated herein by
reference.



ITEM 11.      EXECUTIVE COMPENSATION

         The information required by this item is included under the caption
"EXECUTIVE COMPENSATION" on pages 9 through 15 of the 1997 Proxy Statement and
is incorporated herein by reference, except that the subsections entitled
"Report of Compensation Committee on Executive Compensation" appearing on pages
13 through 14 and "Performance Graph" appearing on page 15 of the 1997 Proxy
Statement shall not be deemed to be so incorporated.



ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

         The information required by this item is included under the caption
"PRINCIPAL STOCKHOLDERS OF THE COMPANY" on pages 3 through 5 of the 1997 Proxy
Statement and is incorporated herein by reference.


ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this item is included under the caption
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" on page 16 of the Company's
1997 Proxy Statement and is incorporated herein by reference.



                                       16

<PAGE>




                                     PART IV

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

         (a)  The following documents are filed or incorporated by reference as 
              a part of this report:

              1.  The financial statements which are incorporated by reference
                  from the Annual Report to Stockholders pursuant to Item 8 as
                  follows:

                  Report of Independent Certified Public Accountants

                  Consolidated Balance Sheets at November 4, 1995 and November 
                  2, 1996

                  Consolidated Statements of Operations For the Years Ended
                  November 5, 1994, November 4, 1995 and November 2, 1996

                  Consolidated Statement of Stockholders' Equity For the Years
                  ended November 5, 1994, November 4, 1995 and November 2, 1996

                  Consolidated Statement of Cash Flows for the Years Ended
                  November 5, 1994, November 4, 1995 and November 2, 1996

                  Notes to Consolidated Financial Statements

              2.  The schedule and report of independent certified public
                  accountants thereon, listed on the Index to Financial
                  Statement Schedules attached hereto.


         (b)  No reports on Form 8-K were filed by the registrant during the
              last quarter of the period covered by this report.




                                       17

<PAGE>



         (c) Exhibits


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

3.1                   Restated Certificate of Incorporation of the Company.  
                      (Incorporated herein by reference to Exhibit 3.2 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

3.2                   By-laws of the Company.  (Incorporated herein by reference
                      to Exhibit 3.4 to the Company's Registration Statement on
                      Form S-1 No. 33- 56270).

4.1                   Loan Agreement, dated as of May 1, 1990, between the 
                      Industrial Development Board of the County of Carroll (the
                      "ID Board") and Henry I. Siegel Company, Inc. ("Siegel").
                      (Incorporated herein by reference to Exhibit 4.12 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

4.2                   Amended and Restated Revolving Credit and Term Loan 
                      Agreement, dated as of December 15, 1994, among the
                      Company, NationsBank of North Carolina, N.A.
                      ("NationsBank"), National Westminster Bank USA ("NatWest")
                      and The Bank of New York ("BONY"). (Incorporated herein by
                      reference to Exhibit 4.3 to the Company's Annual Report on
                      Form 10-K for the fiscal year ended November 5, 1994).

4.3                   Amendment Agreement, dated June 8, 1995, among the
                      Company, NationsBank, NatWest and BONY. (Incorporated
                      herein by reference to Exhibit 4.3 to the Company's Annual
                      Report on Form 10-K for the fiscal year ended November 4,
                      1995).

4.4                   Waiver and Amendment Agreement No. 2, dated as of February
                      2, 1996, among the Company, NationsBank, NatWest and BONY.
                      (Incorporated herein by reference to Exhibit 4.4 to the
                      Company's Annual Report on Form 10-K for the fiscal year
                      ended November 4, 1995).

4.5                   Amendment Agreement No. 3, dated as of December 31, 1996,
                      among the Company, NationsBank and Fleet Bank (f/k/a
                      NatWest).

4.6                   Lease, dated as of September 1, 1993, between the ID Board
                      and Siegel. (Incorporated herein by reference to Exhibit
                      10.30 to the Company's Annual Report on Form 10-K for the
                      fiscal year ended November 6, 1993).

4.7                   Lease, dated as of August 1, 1994, between the City of
                      Hickman, Kentucky, and H.I.S Kentucky, Inc. (Incorporated
                      herein by reference to Exhibit 4.5 to the Company's Annual
                      Report on Form 10-K for the fiscal year ended November 5,
                      1994).







<PAGE>








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

4.8                   Note Agreement, dated as of June 30, 1995, by the Company
                      and each of the Purchasers listed on Schedule 1 thereto
                      (the "Note Agreement"). (Incorporated herein by reference
                      to Exhibit 10.1 of the Company's Quarterly Report on Form
                      10-Q for the quarter ended August 5, 1995).

4.9                   Waiver and Amendment Agreement, dated as of February 14, 
                      1996, among the Company and each of the Purchasers listed
                      on Schedule I attached to the Note Agreement.
                      (Incorporated herein by reference to Exhibit 4.8 to the
                      Company's Annual Report on Form 10-K for the fiscal year
                      ended November 4, 1995).

4.10                  Lease, dated as of February 1, 1995, between Fulton 
                      County, Kentucky and H.I.S Kentucky, Inc. (Incorporated
                      herein by reference to Exhibit 10.1 of the Company's
                      Quarterly Report on Form 10-Q for the quarter ended May 6,
                      1995).

4.11                  Loan Agreement, dated as of April 1, 1995, between the ID 
                      Board and Siegel. (Incorporated herein by reference to
                      Exhibit 10.2 of the Company's Quarterly Report on Form
                      10-Q for the quarter ended May 6, 1995).

9.1                   Voting Trust Agreement ("Voting Trust Agreement 1"), dated
                      as of January 11, 1989, among Milan Danek, Stephen Weiner
                      and Burton M. Rosenberg, as voting trustee. (Incorporated
                      herein by reference to Exhibit 9.1 to the Company's
                      Registration Statement on Form S-1 No.
                      33-56270).

9.2                   Amendment No. 1, dated as of November 24, 1992, to Voting 
                      Trust Agreement 1 among Milan Danek, Stephen Weiner and
                      Burton M. Rosenberg, as voting trustee. (Incorporated
                      herein by reference to Exhibit 9.2 to the Company's
                      Registration Statement on Form S-1 No. 33-56270.)

9.3                   Voting Trust Agreement, dated as of June 27, 1990, among 
                      Nancy Siegel and Hillary Siegel and Burton M. Rosenberg,
                      as voting trustee. (Incorporated herein by reference to
                      Exhibit 9.3 to the Company's Registration Statement on
                      Form S-1 No. 33-56270.)

9.4                   Voting Trust Agreement, dated as of February 2, 1993,
                      among Roland Kimberlin, Robert Luehrs, Harvey Schulman and
                      Burton M. Rosenberg, as voting trustee. (Incorporated
                      herein by reference to Exhibit 9.4 to the Company's Annual
                      Report on Form 10-K for the fiscal year ended November 6,
                      1993).





 

<PAGE>








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

10.1                  Registration Rights Agreement, dated as of November 20, 
                      1992, among the Company, Chrysler Capital Corporation,
                      Whirlpool Financial Corporation, NatWest, B.T. Expedition,
                      Inc. and Jesse S. Siegel. (Incorporated herein by
                      reference to Exhibit 4.14 to the Company's Registration
                      Statement on Form S-1 No. 33-56270).

10.2                  Registration Rights Agreement, dated January 22, 1993, 
                      among the Company and its stockholders as of such date.
                      (Incorporated herein by reference to Exhibit 4.4 to the
                      Company's Annual Report on Form 10- K for the fiscal year
                      ended November 6, 1993).

10.3                  Representatives' Warrant Agreement, dated as of February
                      18, 1993, among the Company, Nomura Securities
                      International, Inc., Josephthal Lyon & Ross Incorporated
                      and Tucker Anthony Incorporated, including Form of
                      Representatives' Warrant Certificate. (Incorporated herein
                      by reference to Exhibit 4.5 to the Company's Annual Report
                      on Form 10- K for the fiscal year ended November 6, 1993).

10.4                  Amended and Restated Consulting Agreement, dated September
                      23, 1988, between Siegel and Jesse S. Siegel.
                      (Incorporated herein by reference to Exhibit 10.1 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

10.5                  Employment Agreement, dated as of March 15, 1996, among 
                      the Company, Siegel and Burton M. Rosenberg.

10.6                  Employment Agreement, dated as of March 15, 1996, among 
                      the Company, Siegel and Roland L. Kimberlin.

10.7                  Employment Agreement, dated as of March 15, 1996, among 
                      the Company, Siegel and Robert F. Luehrs.

10.8                  Employment Agreement, dated as of March 15, 1996, among 
                      the Company, Siegel and Stephen Weiner.

10.10                 Lease, dated November 1989, between Tishomingo County,
                      Mississippi, and Siegel.  (Incorporated herein by 
                      reference to Exhibit 10.14 to the Company's Registration
                      Statement on Form S-1 No. 33- 56270).

10.11                 Lease, dated December 1, 1989, between Tishomingo County,
                      Mississippi, and Siegel. (Incorporated herein by reference
                      to Exhibit 10.15 to the Company's Registration Statement
                      on Form S-1 No. 33- 56270).





 

<PAGE>








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

10.12                 Agreement of Lease, dated as of May 10, 1985, between 
                      Nineteen New York Properties Limited Partnership and
                      Siegel. (Incorporated herein by reference to Exhibit 10.16
                      to the Company's Registration Statement on Form S-1 No.
                      33-56270).

10.13                 Lease, dated November 1, 1968, between Keystone Associates
                      and Siegel, as amended. (Incorporated herein by reference
                      to Exhibit 10.17 to the Company's Registration Statement
                      on Form S-1 No. 33-56270).

10.14                 Lease, dated September 11, 1979, between the Mayor and
                      Board of Aldermen of the Town of Tiptonville, Lake County,
                      Tennessee, and Siegel. (Incorporated herein by reference
                      to Exhibit 10.18 to the Company's Registration Statement
                      on Form S-1 No. 33-56270).

10.15                 Chic by H.I.S, Inc. 1993 Stock Option Plan and First 
                      Amendment thereto. (Incorporated herein by reference to
                      Exhibit 10.19 to the Company's Registration Statement on
                      Form S-1 No. 33-56270).

10.16                 Chic by H.I.S, Inc. 1995 Stock Option Plan for Non-
                      Employee Directors. (Incorporated herein by reference to
                      Exhibit 10.16 to the Company's Annual Report on Form 10-K
                      for the fiscal year ended November 5, 1994).

10.17                 Phoenix Home Life Insurance Plan (Disability Plan).  
                      (Incorporated herein by reference to Exhibit 10.20 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

10.18                 Pension Plan for Eligible Employees, including amendments 
                      I through III thereto). (Incorporated herein by reference
                      to Exhibit 10.21 to the Company's Registration Statement
                      on Form S-1 No. 33-56270).

10.19                 Security Agreement, dated as of May 1, 1990, between the 
                      ID Board and Siegel. (Incorporated herein by reference to
                      Exhibit 10.22 to the Company's Registration Statement on
                      Form S-1 No. 33-56270).

10.20                 Guaranty Agreement, dated as of May 1, 1990, by the 
                      Company in favor of Trust Company Bank, as trustee.
                      (Incorporated herein by reference to Exhibit 10.23 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

10.21                 Letter, dated May 11, 1990, from the Company and Siegel to
                      Bayerische Hypotheken-Und Weschsel-Bank AG. (Incorporated
                      herein by reference to Exhibit 10.24 to the Company's
                      Registration Statement on Form S-1 No. 33-56270).





 

<PAGE>








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

10.22                 Lease, dated October 27, 1986, between Sportswear and
                      Erbengemeinschaft Kellerer, including an amendment
                      thereto. (Translated). (Incorporated herein by reference
                      to Exhibit 10.28 to the Company's Registration Statement
                      on Form S-1 No. 33-56270).

10.23                 Agreement, dated December 28, 1992, between Commerzbank 
                      and Sportswear. (Translated). (Incorporated herein by
                      reference to Exhibit 10.29 to the Company's Registration
                      Statement on Form S-1 No. 33- 56270).

10.24                 Agreement, dated December 18, 1992, among Deutsche Bank,
                      Sportswear, Siegel and the Company. (Translated).
                      (Incorporated herein by reference to Exhibit 10.30 to the
                      Company's Registration Statement on Form S-1 No.
                      33-56270).

10.25                 Agreement, dated June 26, 1991, between Hypo Bank and 
                      Sportswear. (Translated). (Incorporated herein by
                      reference to Exhibit 10.31 to the Company's Registration
                      Statement on Form S-1 No. 33-56270).

10.26                 Licensing and Cooperation Agreement, dated November 2, 
                      1990, between Sportswear and Odevni Prumysl, Statni
                      Podnik. (Incorporated herein by reference to Exhibit 10.32
                      to the Company's Registration Statement on Form S-1 No.
                      33-56270).

10.27                 Licensing Agreement, dated May 29, 1992, between 
                      Sportswear and CONSINVEST Ltd. (Translated). (Incorporated
                      herein by reference to Exhibit 10.33 to the Company's
                      Registration Statement on Form S-1 No. 33-56270).

10.28                 Guaranty Agreement, dated as of September 1, 1993, by the
                      Company in favor of First American National Bank, as
                      Trustee. (Incorporated herein by reference to Exhibit
                      10.31 to the Company's Annual Report on Form 10-K for the
                      fiscal year ended November 6, 1993).

10.29                 Guaranty Agreement, dated as of August 1, 1994, by the
                      Company in favor of First American National Bank.
                      (Incorporated herein by reference to Exhibit 10.29 to the
                      Company's Annual Report on Form 10-K for the fiscal year
                      ended November 5, 1994).

10.30                 Amended and Restated Limited Guaranty Agreement, dated as 
                      of December 15, 1994, by h.i.s Limited in favor of
                      NationsBank. (Incorporated herein by reference to Exhibit
                      10.30 to the Company's Annual Report on Form 10-K for the
                      fiscal year ended November 5, 1994).





 

<PAGE>








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

10.31                 Amended and Restated Limited Guaranty Agreement, dated as 
                      of December 15, 1994, by Chic by H.I.S Licensing
                      Corporation in favor of NationsBank. (Incorporated herein
                      by reference to Exhibit 10.31 to the Company's Annual
                      Report on Form 10-K for the fiscal year ended November 5,
                      1994).

10.32                 Amended and Restated Limited Guaranty Agreement, dated as 
                      of December 15, 1994, by Chic Holdings Corp. in favor of
                      NationsBank. (Incorporated herein by reference to Exhibit
                      10.32 to the Company's Annual Report on Form 10-K for the
                      fiscal year ended November 5, 1994).

10.33                 Amended and Restated Limited Guaranty Agreement, dated as
                      of December 15, 1994, by Siegel in favor of NationsBank.
                      (Incorporated herein by reference to Exhibit 10.33 to the
                      Company's Annual Report on Form 10-K for the fiscal year
                      ended November 5, 1994).

10.34                 Amended and Restated Limited Guaranty Agreement, dated as 
                      of December 15, 1994, by H.I.S Kentucky, Inc. in favor of
                      NationsBank. (Incorporated herein by reference to Exhibit
                      10.34 to the Company's Annual Report on Form 10-K for the
                      fiscal year ended November 5, 1994).

10.35                 Guaranty Agreement, dated as of February 1, 1995, by the
                      Company in favor of First American National Bank, as
                      trustee. (Incorporated herein by reference to Exhibit 10.3
                      of the Company's Quarterly Report on Form 10-Q for the
                      quarter ended May 6, 1995).

10.36                 Guaranty Agreement, dated as of April 1, 1995, by the
                      Company in favor of First American National Bank, as
                      trustee. (Incorporated herein by reference to Exhibit 10.4
                      of the Company's Quarterly Report on Form 10-Q for the
                      quarter ended May 6, 1995).

10.37                 Guaranty Agreement, dated as of June 30, 1995, by Siegel
                      in favor of the Purchasers listed on Annex 1 thereto.
                      (Incorporated herein by reference to Exhibit 10.2 of the
                      Company's Quarterly Report on Form 10-Q for the quarter
                      ended August 5, 1995).

10.38                 Guaranty Agreement, dated as of June 30, 1995, by Chic
                      Holdings Corp. in favor of the Purchasers listed on Annex
                      1 thereto. (Incorporated herein by reference to Exhibit
                      10.3 of the Company's Quarterly Report on Form 10-Q for
                      the quarter ended August 5, 1995).





 

<PAGE>







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

10.39                 Guaranty Agreement, dated as of June 30, 1995, by Chic by
                      H.I.S Licensing Corporation in favor of the Purchasers
                      listed on Annex 1 thereto. (Incorporated herein by
                      reference to Exhibit 10.4 of the Company's Quarterly
                      Report on Form 10-Q for the quarter ended August 5, 1995).

10.40                 Guaranty Agreement, dated as of June 30, 1995, by H.I.S
                      Kentucky, Inc. in favor of the Purchasers listed on Annex
                      1 thereto. (Incorporated herein by reference to Exhibit
                      10.5 of the Company's Quarterly Report on Form 10-Q for
                      the quarter ended August 5, 1995).

10.41                 Guaranty Agreement, dated as of June 30, 1995, by h.i.s
                      Limited in favor of the Purchasers listed on Annex 1
                      thereto. (Incorporated herein by reference to Exhibit 10.6
                      of the Company's Quarterly Report on Form 10-Q for the
                      quarter ended August 5, 1995).

13.1                  Annual Report to Stockholders of the Company for the
                      fiscal year ended November 2, 1996 (including attachment
                      thereto).

21.1                  Subsidiaries of the Company.  (Incorporated herein by 
                      reference to Exhibit 21.1 to the Company's Annual Report
                      on Form 10-K for the fiscal year ended November 5, 1994).

27                    Financial Data Schedule

99.1                  Press Release of the Company dated January 17, 1997.


<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on January 28, 1997.

                                         CHIC BY H.I.S, INC.

                                         By /s/ Burton M. Rosenberg
                                            ---------------------------
                                               (Burton M. Rosenberg)
                                            Chairman of the Board and
                                              Chief Executive Officer


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


<TABLE>
<CAPTION>
Signature                                   Capacity                                    Date
---------                                   --------                                    ----

<S>                                         <C>                                         <C>                     
/s/ Burton M. Rosenberg
-----------------------------               Chairman of the Board,                      January 28, 1997
(Burton M. Rosenberg)                       Chief Executive Officer and Director
                                            (Principal Executive Officer)

/s/ Stuart Jaeger   
-----------------------------               Acting Chief Financial Officer              January 28, 1997
(Stuart Jaeger)                             and Treasurer
                                            (Principal Financial Officer)

/s/ Stuart Jaeger      
-----------------------------               Secretary and Controller                    January 28, 1997
(Stuart Jaeger)                             (Principal Accounting Officer)

/s/ Milan Danek    
-----------------------------               Director                                    January 28, 1997
(Milan Danek)

/s/ Richard K. Howe 
-----------------------------               Director                                    January 28, 1997
(Richard K. Howe)

/s/ Hirsh Jacobson  
-----------------------------               Director                                    January 28, 1997
(Hirsh Jacobson)

/s/ Rica Spector  
-----------------------------               Director                                    January 28, 1997
(Rica Spector)
</TABLE>



<PAGE>


<TABLE>
<CAPTION>
Signature                                   Capacity                                    Date
---------                                   --------                                    ----
<S>                                         <C>                                         <C>    
/s/ Roland L. Kimberlin
-----------------------------               Director                                    January 28, 1997
(Roland L. Kimberlin)

/s/ Robert F. Luehrs  
-----------------------------               Director                                    January 28, 1997
(Robert F. Luehrs)

/s/ Jesse S. Siegel        
-----------------------------               Director                                    January 28, 1997
(Jesse S. Siegel)

/s/ Harvey Silverman      
-----------------------------               Director                                    January 28, 1997
(Harvey Silverman)

/s/ Edward J. Walsh, Jr.  
-----------------------------               Director                                    January 28, 1997
(Edward J. Walsh, Jr.)
</TABLE>



<PAGE>





                          FINANCIAL STATEMENT SCHEDULE

Report of Independent Certified Public Accountants on
     Financial Statement Schedule                                         S - 1

Schedule II- Valuation and Qualifying Accounts                            S - 2



All other schedules are not submitted because they are not required or because
the required information is included in the financial statements or notes
thereto.



<PAGE>




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders of
Chic by H.I.S., Inc. and Subsidiaries


The audits referred to in our report dated December 31,1996, relating to the
consolidated financial statements of Chic by H.I.S., Inc. and Subsidiaries,
which is referred to in Item S of this Form 10-k, included the audit of the
accompanying financial statement schedule. This financial statement schedule is
the responsibility of the Company's management Our responsibility is to express
an opinion on this financial Statement schedule based on our audits.

In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.



BDO Seidman, LLP

New York, New York
December 31, 1996






                                       S-1



<PAGE>



                               CHIC BY H.I.S, INC.
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER 5, 1994
COLUMN A                        COLUMN B             COLUMN C           COLUMN D            COLUMN E
--------------------            ------------------   ----------------  ------------------   ---------------
                                BALANCE AT                                                    BALANCE
                               BEGINNING OF                                                  AT END OF
DESCRIPTION                      PERIOD              ADDITIONS         DEDUCTIONS             PERIOD
--------------------            ------------------   ----------------  ------------------   ---------------
<S>                            <C>                   <C>               <C>                  <C>          
RESERVE FOR
  UNCOLLECTIBLE ACCOUNTS
  AND RETURNS AND
  ALLOWANCES                           $270                  $0                 $1              $269
                                =============         ===========       =============        ===========


YEAR ENDED
 NOVEMBER 4 , 1995
COLUMN A                            COLUMN B            COLUMN C            COLUMN D           COLUMN E
--------------------            ------------------   ----------------  ------------------   ---------------
                                   BALANCE AT                                                 BALANCE
                                   BEGINNING OF                                               AT END OF
DESCRIPTION                         PERIOD             ADDITIONS          DEDUCTIONS          PERIOD
--------------------            ------------------   ----------------  ------------------   ---------------

RESERVE FOR
  UNCOLLECTIBLE ACCOUNTS
  AND RETURNS AND
  ALLOWANCES                           $269                $102                 $0              $371
                                 ============        ===========        =============        ===========

YEAR ENDED
NOVEMBER 2, 1996
COLUMN A                            COLUMN B            COLUMN C           COLUMN D            COLUMN E
--------------------            ------------------   ----------------  ------------------   ---------------
                                   BALANCE AT                                                 BALANCE
                                   BEGINNING OF                                             AT END OF
DESCRIPTION                        PERIOD              ADDITIONS          DEDUCTIONS          PERIOD
--------------------            ------------------   ----------------  ------------------   ---------------

RESERVE FOR
  UNCOLLECTIBLE ACCOUNTS
  AND RETURNS AND
  ALLOWANCES                          $371                  $0                $246             $125
                                =============        ===========        =============        ===========
</TABLE>





                                       S-2