UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form
10-Q  (X)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934  For
the quarterly period ended June 30, 2008 or  (
 )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934  Commission File Number 1-13082  KENNETH COLE PRODUCTIONS, INC. (Exact name of registrant as specified in its charter)  New York
13-3131650(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)   603 West 50th Street, New York, NY
10019(Address of principal executive offices)
(Zip Code)  (212)
265-1500 (Registrants telephone number, including area code)  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 whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act.  Large accelerated filer ( )
  Accelerated filer (X) Non-accelerated filer ( ) (Do not check if a
smaller reporting company) Smaller reporting company ( ).  Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes ( ) No (X)  Indicate the number of shares outstanding
of each of the issuers classes of common stock, as of the latest practicable
date:  Class
August 4, 2008Class A Common Stock ($.01 par
value)
9,864,818Class B Common Stock ($.01 par
value)
8,010,497            Kenneth Cole Productions, Inc. Index
to Form 10-Q  Part
I.
FINANCIAL
INFORMATIONItem
1.
Financial
Statements (Unaudited)Condensed Consolidated Balance
Sheets as of June 30, 2008 and
December
31, 2007
3Condensed
Consolidated Statements of Operations for the three- and six-month periods ended June 30, 2008 and 2007
5Condensed
Consolidated Statement
of Changes in Shareholders Equity
for
the six-month period ended June 30,
2008
6Condensed
Consolidated
Statements of Cash Flows for the six-month periods ended June 30, 2008 and
2007
7Notes
to Condensed Consolidated Financial Statements
8Item
2.
Managements
Discussion and Analysis of Financial Condition and
Results
of Operations
16Item
3.
Quantitative
and Qualitative Disclosures about Market Risk
22Item
4.
Controls
and Procedures
23Part
II.
OTHER
INFORMATIONItem
1.
Legal
Proceedings
23Item
1A.
Risk
Factors
23Item
2.
Unregistered
Sales of Equity Securities and Use of Proceeds
24Item
3.
Defaults
Upon Senior Securities
24Item
4.
Submission
of Matters to a Vote of Security Holders
24Item
5.
Other
Information
25Item
6.
Exhibits
25Signatures
26   2       Part I. FINANCIAL
INFORMATION  Item 1.
 Financial Statements     Kenneth
Cole Productions, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited)   June 30,
2008
December 31,
2007AssetsCurrent
assets:Cash
and cash equivalents
$
72,867,000
$
90,653,000Due
from factors
21,061,000
28,132,000Accounts
receivable, net
17,398,000
19,805,000Inventories,
net
48,841,000
48,033,000Prepaid
expenses and other current assets
7,521,000
2,998,000Deferred
taxes, net
4,711,000
5,173,000Total
current assets
172,399,000
194,794,000Property
and equipment, at cost, less accumulateddepreciation
and amortization
58,721,000
60,357,000  Other
assets:Intangible
assets
16,503,000
14,083,000Deferred
taxes, net
26,152,000
24,660,000Investments
and other
12,118,000
14,914,000Deferred
compensation plans assets
44,541,000
45,729,000Total
other assets
99,314,000
99,386,000Total
Assets
$330,434,000
$354,537,000    See
accompanying notes to condensed consolidated financial statements.   3     Kenneth
Cole Productions, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (continued) (Unaudited)  June 30,
2008
December 31,
2007Liabilities
and Shareholders EquityCurrent
liabilities:Accounts
payable and accrued expenses
$
37,755,000
$
39,470,000Other
current liabilities
10,827,000
10,852,000Deferred
income
6,825,000
5,071,000Total
current liabilities
55,407,000
55,393,000Accrued
rent and other long-term liabilities
15,901,000
14,762,000Deferred
compensation plans liabilities
41,635,000
42,392,000Commitments
and contingenciesShareholders
Equity:Series
A Convertible Preferred Stock, par value
$1.00,
1,000,000 shares authorized,
none
outstandingClass
A Common Stock, par value $.01,
40,000,000
shares authorized; 15,709,083
and
15,604,673 issued as of June 30, 2008 and December 31, 2007,
respectively
157,000
156,000Class
B Common Stock, par value $.01,
9,000,000
shares authorized; 8,010,497 issued
and
outstanding as of June 30, 2008
and
December 31, 2007, respectively
80,000
80,000Additional
paid-in capital
100,712,000
99,277,000Accumulated
other comprehensive (loss)/income
(206,000)
914,000Retained
earnings
237,260,000
242,108,000338,003,000
342,535,000Class
A Common Stock in treasury, at cost, 5,518,350 and 4,236,350 shares as of
June 30, 2008 and December 31, 2007, respectively
(120,512,000)
(100,545,000)Total
Shareholders Equity
217,491,000
241,990,000Total
Liabilities and Shareholders Equity
330,434,000
$354,537,000   See
accompanying notes to condensed consolidated financial statements.  4      Kenneth
Cole Productions, Inc. and Subsidiaries  Condensed Consolidated Statements of Operations (Unaudited)   Three Months Ended
June 30,
Six Months Ended
June
30,2008
2007

2008
2007Net
sales
$100,893,000
$108,337,000

$213,508,000
$228,205,000Royalty
revenue
10,258,000
10,612,000

20,140,000
20,082,000Net
revenues
111,151,000
118,949,000

233,648,000
248,287,000Cost
of goods sold
65,107,000
66,224,000

137,377,000
143,008,000Gross
profit
46,044,000
52,725,000

96,271,000
105,279,000Selling,
general and administrative expenses
49,102,000
48,906,000

98,217,000
97,127,000Operating
(loss)/income
(3,058,000)
3,819,000

(1,946,000)
8,152,000Interest
and other
income,
net
116,000
1,554,000

410,000
2,815,000(Loss)/income
before (benefit from)/provision for income taxes
(2,942,000)
5,373,000

(1,536,000)
10,967,000(Benefit
from)/provision for income taxes
(890,000)
2,069,000

(291,000)
4,223,000Net
(loss)/income
$ (2,052,000)
$
  3,304,000

$ (1,245,000)
$
  6,744,000(Loss)/earnings
per share:Basic
$(0.11)
$0.16

$(0.07)
$0.33Diluted
$(0.11)
$0.16

$(0.07)
$0.33Dividends
declared per
share
$0.09
$0.18

$0.18
$0.36Shares
used to compute earnings per share:Basic
18,583,000
20,225,000

18,954,000
20,152,000Diluted
18,583,000
20,566,000

18,954,000
20,480,000   See
accompanying notes to condensed consolidated financial statements.  5


Kenneth Cole Productions, Inc. and Subsidiaries  Condensed Consolidated Statement of Changes in Shareholders
Equity (Unaudited) Class A
Common Stock
Class B
Common Stock
Additional
Accumulated
Other

Treasury StockNumber
of
shares
Amount
Number
of
shares
Amount
Paid-in
Capital
Comprehensive
Income/(Loss)
Retained
Earnings
Number of
Shares
Amount
TotalShareholders
equity
January
1, 2008
15,604,673
$156,000
8,010,497
$80,000
$99,277,000
$914,000
$242,108,000
(4,236,350)
$(100,545,000)
$241,990,000Net loss






(1,245,000)


(1,245,000)Translation
adjustment for foreign currency, net of taxes of $(8,000)





62,000



62,000Unrealized
loss on available-for-sale securities, net of taxes of $(740,000)





(1,182,000)



(1,182,000)Comprehensive
loss









(2,365,000)Stock-based
compensation expense




2,647,000




2,647,000Exercise
of stock options and related tax benefits
5,000
-


65,000




65,000Issuance
of restricted stock and related tax benefits
137,529
1,000


(632,000)




(631,000)Shares
surrendered by employees to pay taxes on restricted stock
(45,830)
-


(757,000)




(757,000)Issuance
of Class A Common Stock from ESPP
7,711
-


112,000




112,000Purchase
of Class A Stock







(1,282,000)
(19,967,000)
(19,967,000)Dividends
paid on common stock






(3,603,000)


(3,603,000)Shareholders
equity
June
30, 2008
15,709,083
$157,000
8,010,497
$80,000
$100,712,000
$(206,000)
$237,260,000
(5,518,350)
$(120,512,000)
$217,491,000 See
accompanying notes to condensed consolidated financial statements   6  Kenneth Cole
Productions, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Six
Months Ended
June 30,2008
2007Cash
flows provided by operating activitiesNet
(loss)/income
$(1,245,000)
$
6,744,000Adjustments
to reconcile net (loss)/income to net cash
used
in operating activities:Depreciation
and amortization
4,609,000
5,882,000Provision
for doubtful accounts
60,000
122,000Benefit
from deferred taxes
(290,000)
(1,654,000)Unrealized
loss from available-for-sale securities
1,182,000
730,000Loss
on investments
832,000
--Stock-based
compensation expense
2,647,000
3,594,000Tax
benefit from stock option exercises and restricted stock vestings
(875,000)
(829,000)Changes
in operating assets and liabilities:Decrease
in due from factors
7,071,000
5,186,000Decrease
in accounts receivable
2,347,000
4,060,000Increase
in inventories
(808,000)
(2,987,000)(Increase)/decrease
in prepaid expenses and other current assets
(4,279,000)
92,000Decrease/(increase)
in other assets
48,000
(5,430,000)Decrease
in accounts payable and accrued expenses
(1,215,000)
(4,813,000)Increase/(decrease)
in deferred income and other current liabilities
1,830,000
(1,100,000)Decrease
in income taxes payable
--
(2,532,000)Increase
in other long-term liabilities
382,000
6,634,000Net
cash provided by operating activities
12,296,000
13,699,000Cash
flows used in investing activitiesAcquisition
of property and equipment
(2,843,000)
(6,582,000)Purchase
of intangible assets
(3,050,000)
(507,000)Purchases
of marketable securities and other investments
--
(750,000)Net
cash used in investing activities
(5,893,000)
(7,839,000)Cash
flows used in financing activitiesShares
surrendered by employees to pay taxes on restricted stock
(757,000)
(783,000)Excess tax
benefit from stock options
7,000
794,000Proceeds
from exercise of stock options
58,000
3,320,000Proceeds
from employee stock purchase plan
112,000
201,000Acquisition
of treasury shares
(19,967,000)
--Dividends
paid to shareholders
(3,603,000)
(7,336,000)Net
cash used in financing activities
(24,150,000)
(3,804,000)Effect
of exchange rate changes on cash
(39,000)
(30,000)Net
(decrease)/increase in cash
(17,786,000)
2,026,000Cash
and cash equivalents, beginning of period
90,653,000
105,441,000Cash
and cash equivalents, end of period
$
72,867,000
$107,467,000Supplemental
disclosures of cash flow informationCash
paid during the period for:Interest
$
       26,000
$
         1,000Income
taxes, net
$
  2,836,000
$
  7,756,000 See
accompanying notes to condensed consolidated financial statements.   7


Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)    1.  Basis of Presentation  The accompanying unaudited condensed consolidated financial
statements have been prepared by Kenneth Cole Productions, Inc. (the Company)
in accordance with accounting principles generally accepted in the United States
for interim financial information.  Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.  Certain
items contained in these financial statements are based on estimates.  In
the opinion of the Companys management, the accompanying unaudited condensed
consolidated financial statements reflect all significant adjustments,
consisting of only normal and recurring adjustments, necessary for a fair
presentation of the financial position and results of operations and cash flows
for the periods presented.  All significant intercompany transactions have
been eliminated.  Operating results for the six months ended June 30, 2008 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2008.  These unaudited condensed consolidated financial
statements should be read in conjunction with the financial statements and
footnotes included in the Companys Annual Report on Form 10-K for the year
ended December 31, 2007.  The Companys consolidated Balance Sheet at December 31, 2007, as
presented, was derived from the audited financial statements included in the
Companys Annual Report on Form 10-K for the period ended December 31, 2007.
 Certain amounts in the Companys previous financial statements have been
reclassified to conform to the 2008 presentation.  2.  Stock-Based Compensation  The Company has stock-based compensation plans under which
directors, officers and other eligible employees receive stock options,
restricted stock, and other equity-based awards, and accounts for the related
stock-based compensation under Statement of Financial Accounting Standards No.
123R, Share-Based Payment (SFAS 123R), as described in Note 13 to the
Companys Consolidated Financial Statements for the year ended December 31,
2007.  Stock options are granted with an exercise price equal to the
market value of a share of common stock on the date of grant.  Stock option
grants expire within 10 years and vest on a graded basis within two to five
years from the date of grant.  Restricted stock unit awards generally vest
on a graded basis over a three to four year period or cliff vest after three
years.  During the six-month periods ended June 30, 2008 and 2007, the
Company granted 841,500 and 20,000 stock options, respectively.  Also,
during the six month periods ended June 30, 2008 and 2007, the Company granted
127,462 and 283,959 shares of restricted stock, respectively.  Stock
options outstanding and unvested restricted stock amounted to 2,495,929 and
580,312 shares, respectively, as of June 30, 2008.           8   Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)    2.  Stock-Based Compensation (continued)  The following table summarizes the components of stock-based
compensation expense for the three and six months ended June 30, 2008 and 2007,
all of which is included in Selling, general, and administrative expenses in the
Condensed Consolidated Statements of Operations:   Three months ended
June 30,
Six months ended
June 30,2008
2007
2008
2007Stock
options
$  204,000
$   534,000
$  360,000
$   923,000Restricted
stock units and employee stock purchase plan
1,484,000
1,744,000
2,208,000
2,671,000Total
stock-based compensation expense
$1,688,000
$2,278,000
$2,568,000
$3,594,000  The fair value of stock options was estimated using the
Black-Scholes option-pricing model.  The following table summarizes the
assumptions used to compute the weighted-average fair value of stock option
grants for the three and six months ended June 30, 2008 and 2007:  2008 (1)
2007 (1)Weighted-average
volatility
38.4%
47.9%Risk-free
interest rate
4.0% to 4.1%
4.8%Weighted-average
dividend yield
2.4%
3.0%Expected
term
4-9 years
9 years____________ (1)  No stock options were granted in the first quarter.  The weighted-average volatility for the current period was
developed using historical volatility for periods equal to the expected term of
the options.  The risk-free interest rate was developed using the U.S.
Treasury yield curve for periods equal to the expected term of the options on
the grant date.  The dividend yield is calculated by using the dividends
declared per share and the Companys stock price on the date of grant.  The
expected term of stock option grants was developed after considering vesting
schedules, life of the option, historical experience and estimates of future
exercise behavior patterns.  The fair value of restricted stock was calculated by multiplying
the Companys stock price on the date of grant by the number of shares granted
and is currently being amortized over the vesting periods of the individual
grants.  SFAS 123R requires the recognition of stock-based compensation for
the number of awards that are ultimately expected to vest.  As a result,
for most awards, recognized stock compensation expense was reduced for estimated
forfeitures prior to vesting primarily based on historical annual forfeiture
rates by employee classification.  Estimated forfeitures will be reassessed
in subsequent periods and may change based on new facts and circumstances.  As of June 30, 2008, approximately $12.2 million of unrecognized
stock compensation expense related to unvested awards, net of estimated
forfeitures, is expected to be recognized over a weighted-average period of 2.4
years.  9  Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)   3. Earnings Per Share  The Company calculates earnings per share in accordance with SFAS
No. 128, Earnings Per Share.  Basic earnings per share are
calculated by dividing net (loss)/income by weighted-average common shares
outstanding.  Diluted earnings per share are calculated similarly, except
that it includes the dilutive effect of the assumed exercise of securities under
the Companys stock incentive plans.  Dilutive securities, which include
stock options and restricted stock, are determined under the treasury stock
method by calculating the assumed proceeds available to repurchase stock using
the weighted-average shares outstanding for the period.  Basic and diluted
(loss)/earnings per common share consist of the following:  Three
Months Ended
                    Six
Months Ended June  30, 2008
June  30,
2007
June  30, 2008
June  30,
2007Weighted-average commonshares outstanding
18,583,000
20,225,000
18,954,000
20,152,000Effect of dilutive securities:Restricted stock & employee
    stock purchase plan
--
147,000
--
128,000Stock options
--
194,000
--
200,000Weighted-average commonshares outstanding and commonshare equivalents
18,583,000
20,566,000
18,954,000
20,480,000  All stock options and restricted stock outstanding as of June 30,
2008 have not been included in the diluted per share calculation as the Company
has recorded a net loss for the three and six months ended June 30, 2008 and the
impact would be antidilutive.  Stock options outstanding as of June 30,
2007, in an aggregate amount of 721,000 have not been included in the diluted
per share calculations since their effect would be antidilutive.  10  Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)   4. Investments  The Company reviews its investments for other-than-temporary
impairment whenever the fair value of an investment is less than amortized cost
and evidence indicates that an investments carrying value may not be
recoverable within a reasonable period of time.  The fair value of the
Companys auction rate securities is determined from third-party investment
statements.  The primary variables used in determining fair
value include risk premium, estimated redemption date and investment coupon
rate.  In the Companys evaluation of its investments in 2008, it
considered its ability and intent to hold the investment until the market price
recovers, the reasons for the decline in fair value, the duration of the decline
in fair value and expected future performance.  Based on this evaluation,
the Company recorded a loss of $0.8 million on its marketable securities,
specifically auction rate securities, and determined that declines on its other
investments were not other-than-temporary.  The following table presents
gross unrealized losses on, and estimated fair value of the Companys long-term
investments as of June 30, 2008 and December 31, 2007:  June 30, 2008
December 31, 2007Estimated Fair Value
Unrealized Gains/(Losses)
Estimated Fair Value
Unrealized Gains/(Losses)Marketable
Securities
$  7,473,000
--
$
 8,305,000
--Other
Investments
$  2,726,000
$(2,612,000)
$  4,648,000
$(690,000)Total
$10,199,000
$(2,612,000)
$12,953,000
$(690,000)  5. Fair Value Measurement  The Company adopted FASB Statement No. 157, Fair Value
Measurements (SFAS 157) provisions on January 1, 2008.  In February
2008, the FASB deferred the effective date of SFAS 157 for one year for
nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis.
 The Companys financial assets measured at fair value on a recurring basis
were as follows:  Fair Value at
June 30, 2008
HierarchyMarketable
securities
$7,473,000
Level 2Investments
$2,726,000
Level 1Deferred
compensation plans assets
$38,233,000
Level 2  A Level 1 hierarchy represents a fair value that is derived from
unadjusted quoted prices in active markets for identical assets or liabilities
that the Company has the ability to access at the measurement date.  A
Level 2 hierarchy represents a fair value that is derived from inputs other than
quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.  The Company recorded a $0.2 and
$0.8 million writedown in its marketable securities, specifically auction rate
securities, within Interest and other income, net in the Condensed Consolidated
Statements of Operations during the three and six-month periods ended June 30,
2008, respectively.     11  Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)    6. Comprehensive (Loss)/Income  Comprehensive (loss)/income is comprised of net (loss)/income, the
effect of foreign currency translation and changes in unrealized gains and
losses on available-for-sale securities.  Comprehensive loss for the three-
and six-month periods ended June 30, 2008 amounted to $2,667,000 and $2,365,000,
respectively.  Comprehensive income for the three- and six-month periods
ended June 30, 2007 amounted to $2,403,000 and $6,342,000, respectively.  7. Segment Information  The Company has three reportable segments:  Wholesale,
Consumer Direct and Licensing.  The Wholesale segment designs and sources a
broad range of fashion footwear, handbags and accessories and markets its
products for sale to approximately 6,000 department and specialty store
locations and to the Companys Consumer Direct segment.  The Consumer
Direct segment markets a broad selection of the Companys branded products,
including licensee products, for sale directly to the consumer through its own
channels of distribution, which include full-priced retail stores, Company
Stores and e-commerce (at website addresses www.kennethcole.com
and www.kennethcolereaction.com).  The Licensing segment,
through third-party licensee agreements, has evolved the Company from a footwear
resource to a diverse lifestyle brand competing effectively in approximately 30
apparel and accessories categories for both men and women.  The Company
maintains control over quality, image and distribution of the licensees.
 This segment primarily consists of royalties earned on licensee sales to
third parties of the Companys branded products and royalties earned on the
purchase and sale to foreign retailers, distributors, or to consumers in foreign
countries.  The Companys reportable segments are business units that offer
products to overlapping consumers through different channels of distribution.
 Each segment is managedseparately, althoughplanning,
implementation and results are reviewed internally by the executive management
committee.  The Company evaluates performance of each of its segments and
allocates resources based on profit or loss before unallocated corporate
overhead, stock-based compensation expense and income taxes for each segment.
 Intersegment sales between the Wholesale and Consumer Direct segment are
eliminated in consolidation.   12  Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)  7. Segment
Information (continued)  Financial information of the Companys reportable segments is as
follows (in thousands):  Three Months
Ended



Six
Months EndedJune
30, 2008



June 30,
2008Consumer


ConsumerWholesale
Direct
Licensing
Totals

Wholesale
Direct
Licensing
TotalsRevenue from external customers
57,934
42,959
10,258
111,151

132,031
81,477
20,140
233,648Intersegment revenues
10,622


10,622

20,502


20,502Segment (loss)/income (1)
(3,897)
(2,760)
7,539
882

(1,323)
(8,631)
15,033
5,079Segment assets (2)





216,564
52,267
61,603
330,434  Three Months
Ended



Six
Months EndedJune 30,
2007



June 30,
2007Consumer


ConsumerWholesale
Direct
Licensing
Totals

Wholesale
Direct
Licensing
TotalsRevenue from external customers
67,117
41,220
10,612
118,949

150,061
78,144
20,082
248,287Intersegment revenues
6,565


6,565

13,169


13,169Segment income/(loss) (1)
3,294
(2,423)
8,836
9,707

12,837
(10,375)
15,988
18,450Segment assets (2)





261,514
60,711
42,022
364,247 _________________  (1) Before unallocated corporate overhead, stock-based compensation
expense and income taxes. (2) The Wholesale segment includes corporate assets.  The
reconciliation of the Companys reportable segment revenues and (loss)/income
are as follows (in thousands):  Three Months Ended
Six Months
EndedJune 30, 2008
June 30, 2007
June 30, 2008
June 30,
2007RevenuesRevenues for external
customers
$111,151
$118,949
$233,648
$248,287Intersegment revenues (1)
10,622
6,565
20,502
13,169Elimination of intersegment
revenues
(10,622)
(6,565)
(20,502)
(13,169)Total consolidated
revenues
$111,151
$118,949
$233,648
$248,287(Loss)/IncomeTotal income for reportable segments
(1)
$
      882
$    9,707
$    5,079
$18,450Elimination of stock-based compensation expense and
unallocated overhead
(3,824)
(4,334)
(6,615)
(7,483)Total (loss)/income before income taxes
$ (2,942)
$    5,373
$ (1,536)
$10,967_____________________  (1) Before unallocated corporate overhead, stock-based compensation
expense and income taxes.  Revenues from international customers were approximately 3.0% and
2.2% of the Companys consolidated revenues for the three months ended June 30,
2008 and 2007, respectively, and approximately ­­­­3.7% and 2.5%
of the Company's consolidated revenues for the six months ended June 30, 2008
and 2007, respectively. 13 Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)  8. Related Party Transactions  The Company has an exclusive license agreement with Iconix Brand
Group, Inc. and its trademark holding company, IP Holdings, LLC (Iconix), to
use the Bongo trademark in connection with the manufacture, sale and
distribution of womens, mens and childrens footwear in certain territories.
 The Chief Executive Officer and Chairman of Iconix is the brother of the
Companys Chairman and Chief Creative Officer.  The term of the agreement
is through December 31, 2010.  Management believes that the license
agreement with Iconix was entered into at arms-length.  During these
periods, the Company is obligated to pay Iconix a percentage of net sales based
upon the terms of the agreement.  The Company recorded approximately
$284,000 and $573,000 in aggregate royalty and advertising expense under the
agreement for the three- and six-month periods ended June 30, 2008,
respectively.  The Company recorded approximately $240,000 and $511,000 in
aggregate royalty and advertising expense under the agreement for the three- and
six-month periods ended June 30, 2007, respectively.  The Company recorded expenses of approximately $91,000 and
$266,000 for the three and six months ended June 30, 2008, respectively, to a
third-party aviation company which hires and uses an aircraft partially owned by
Emack LLC, a company which is wholly owned by the Companys Chairman and Chief
Creative Officer.  During the three and six months ended June 30, 2007, the
Company recorded expenses of approximately $114,000 and $229,000, respectively,
for hire and use of aircraft partially owned by Emack LLC.  Management
believes that all transactions were made on terms and conditions similar to or
more favorable than those available in the marketplace from unrelated
parties.  9. Common Stock Repurchase  During the three months ended June 30, 2008, the Company
repurchased 868,600 of its shares at an aggregate price of $13,167,000.
 During the six months ended June 30, 2008, the Company repurchased
1,282,000 of its shares at an aggregate price of $19,967,000.  10. Intangible Asset Purchase  In September 2007, the Company acquired the Le Tigre
trademark and other intellectual property associated with the Le Tigre
brand from Le Tigre, LLC (the Seller).  The Company paid the Seller $13
million and will potentially make additional payments of up to $12 million to
the Seller based upon the achievement of performance targets.  On May 19, 2008, the Company amended the Asset Purchase Agreement
(the Amendment) it had previously entered into with the Seller.  Upon the
mutual execution of the Amendment, the Company paid the Seller $2.5 million for
achieving one of the performance targets in the Amendment.  Management
allocated the majority of the $2.5 million paid to the trademark and a nominal
amount to other intellectual property.  Any additional payments will be
recorded as an increase primarily to the trademark.  11. New Accounting Pronouncements  In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133 (SFAS 161).  SFAS 161
amends and expands the disclosure requirements of SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities.SFAS 161 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008.  The Company is
currently evaluating the requirements and impact of SFAS 161 on the
Companys consolidated financial statements.  14  Kenneth Cole Productions, Inc. and Subsidiaries Notes to
Condensed Consolidated Financial Statements (Unaudited)   11. New Accounting Pronouncements (continued)  In April 2008, the FASB issued FASB Staff Position FAS 142-3,
Determination of the Useful Life of Intangible Assets (FSP 142-3).
 FSP 142-3 amends the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under SFAS No. 142, Goodwill and Other
Intangible Assets (SFAS 142).  The intent of FSP 142-3 is to improve
the consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair value of
the asset under SFAS No. 141R Business Combinations(SFAS 141R) and
other applicable accounting literature.  FSP 142-3 is effective for
financial statements issued for fiscal years beginning after December 15, 2008
and must be applied prospectively to intangible assets acquired after the
effective date.  The Company is currently evaluating the impact of FSP
142-3 on the Companys consolidated financial statements.  In May 2008, the FASB issued SFAS No. 162, Hierarchy of
Generally Accepted Accounting Principles(SFAS 162).  This statement
is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in
preparing financial statements of nongovernmental entities that are presented in
conformity with GAAP.  This statement will be effective sixty days
following the U.S. Securities and Exchange Commissions approval of the Public
Company Accounting Oversight Board amendment to AU Section 411, The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting
Principles.  The Company is currently evaluating the impact of SFAS
162 on the Companys consolidated financial statements.  12.  Subsequent Event  On July 23, 2008, the Companys Board of Directors declared a
quarterly cash dividend of $0.09 per share payable on September 10, 2008, which
will be paid to shareholders of record at the close of business on August 21,
2008.  15    Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS  Forward-Looking Statements Disclosure  The statements contained in this report which are not historical
facts, including, without limitation, statements that relate to future
performance and/or statements regarding the Companys anticipated results or
level of business for 2008 or any other future period, may be deemed to
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995.  Such statements are based on
current expectations only, and actual future results might differ materially
from those projected in such statements due to a number of risks and
uncertainties, including, but not limited to, demand and competition for the
Companys products, the ability to enter into new licensee agreements, to
maintain and renew existing licensing agreements, and to open new stores,
changes in consumer preferences or fashion trends, events causing disruption in
product shipment, change in import regulations, dependence on certain large
customers, changes in the Companys relationships with vendors and other
resources, the launching or prospective development of new business initiatives,
future licensee sales growth, gross margins, store expansion, renovation and
openings, changes in distribution centers, and the implementation of management
information systems.  The forward-looking statements contained herein are
also subject to other risks and uncertainties that are described in the
Companys reports and registration statements filed with the Securities and
Exchange Commission.  The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of new
information, future results or otherwise.  Update on Critical Accounting Policies and Estimates  The Companys consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States,
which require the Company to make estimates in the application of its accounting
policies based on the best assumptions, judgments and opinions of management.
 For a summary of the Companys significant accounting policies, see the
Companys Consolidated Financial Statements included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2007.  Overview  Kenneth Cole Productions, Inc., incorporated in September 1982,
designs, sources and markets a broad range of fashion footwear and handbags and,
through license agreements, designs and markets apparel and accessories under
its Kenneth Cole New York, Kenneth Cole Reaction, Unlisted,
Tribeca and Gentle Souls brand names.  The Company also has
the rights to use the Bongo trademark for footwear through a license
agreement.  In addition, the Company acquired the Le Tigre trademark
and other intellectual property associated with the Le Tigre brand during
September 2007.  The Companys products are targeted to appeal to fashion
conscious consumers, reflecting a casual urban perspective and a lifestyle
uniquely associated with Kenneth Cole.  These products include core
basics that generally remain in demand from season to season and fashion
products that are designed to establish or capitalize on market trends.
 The combination of basic products and fashion styles provides freshness in
assortments and maintains a fashion-forward image, while a multiple brand
strategy helps diversify business risk.  The Company markets its products to approximately 6,000 department
and specialty store locations, as well as through its Consumer Direct business,
which includes full-priced retail stores, Company Stores and e-commerce.
 The Company believes the diversity of its productofferings distinguishes the Company from its
competitors in terms of product classifications (mens, womens and childrens
footwear, handbags, apparel and accessories), prices (from better to
moderate) and styling.  The Company believes the diversity of its product
mix provides balance to its overall product sales and business planning and
increases sales opportunities to Wholesale customers who do not carry the
Companys full range of products.   16     The popularity of the Kenneth Cole brand names, including
Kenneth Cole New York, Kenneth Cole Reaction and Unlisted,among
consumers has enabled the Company to expand its product offerings and channels
of distribution through licensing agreements.  The Company offers, through
these agreements, a lifestyle collection of mens product categories, including
tailored clothing, dress shirts, dress pants, neckwear, business cases, jewelry,
belts, leather and fabric outerwear, cold-weather accessories, sunglasses,
prescription eyewear, watches, fragrance, luggage, loungewear, hosiery and small
leather goods.  In addition, mens sportswear, which was formerly offered
pursuant to a license agreement, is being sold, marketed and distributed by the
Company directly.  Womens product categories currently being sold pursuant
to license agreements include sportswear, small leather goods, belts, scarves
and wraps, hosiery, loungewear, leather and fabric outerwear, sunglasses,
prescription eyewear, watches, jewelry, fragrance, swimwear and luggage.
 In addition, the Company licenses its childrens apparel further
broadening the branded lifestyle collection.  The Company recorded net revenues of $111.2 million for the three
months ended June 30, 2008.  Diluted earnings per share decreased to
$(0.11) for the three months ended June 30, 2008 from $0.16 for the three months
ended June 30, 2007.  As of June 30, 2008, the Company had $72.9 million in
cash and cash equivalents with no debt.  In addition, the Company has a
five-year $100 million committed Revolving Credit Facility and will pay a
quarterly cash dividend of $0.09 per share on September 10, 2008, which will be
paid to shareholders of record at the close of business on August 21, 2008.  Results of Operations  The following table sets forth the Companys Condensed
Consolidated Statements of Operations in thousands of dollars and as a
percentage of net revenues for the three and six months ended June 30, 2008 and
June 30, 2007.  Three
Months Ended Six
Months Ended June
30, June
30, 2008
2007

2008
2007Net sales
$100,893
90.8%
$108,337
91.1%

$213,508
91.4%
$228,205
91.9%Royalty revenue
10,258
9.2
10,612
8.9

20,140
8.6
20,082
8.1Net revenues
111,151
100.0
118,949
100.0

233,648
100.0
248,287
100.0Gross profit (1)
46,044
41.4
52,725
44.3

96,271
41.2
105,279
42.4Selling, general
and administrative expenses
49,102
44.2
48,906
41.1

98,217
42.0
97,127
39.1Operating (loss)/income
(3,058)
(2.7)
3,819
3.2

(1,946)
(0.8)
8,152
3.3Interest and other income, net
116
0.1
1,554
1.3

410
0.2
2,815
1.1(Loss)/income before income taxes
(2,942)
(2.6)
5,373
4.5

(1,536)
(0.6)
10,967
4.4Income tax (benefit)/expense
(890)
(0.8)
2,069
1.7

(291)
(0.1)
4,223
1.7Net (loss)/income
$ (2,052)
(1.8)%
$   3,304
2.8%

$ (1,245)
(0.5)%
$    6,744
2.7% _________________  (1) Gross Profit may not be comparable to other entities, since some
entities include the costs related to their distribution network (receiving and
warehousing) in cost of goods sold and others entities, similar to the Company,
exclude these costs from gross profit, including them instead in a line item
such as selling, general and administrative expenses.  Three Months Ended June 30, 2008 Compared to Three Months Ended
June 30, 2007  REVENUES:  Net revenues decreased $7.7 million, or 6.6%, to
$111.2 million for the three months ended June 30, 2008 from $118.9 million for
the three months ended June 30, 2007.  The decrease in revenues occurred in
the Companys Wholesale and Licensing segments as further described below in the
section entitled NET SALES.  NET
SALES: Wholesale net sales (excluding sales to the Companys Consumer Direct
business segment) decreased $9.2 million, or 13.7%, to $57.9 million, for the
three months ended June 30, 2008 from $67.1 million for the three months  17  ended
June 30, 2007.  The decrease was primarily attributable to a decline in
sales across the Companys branded footwearbusinesses, offset by
incremental sales from the Companys in-house launch of its mens sportswear
collections previously licensed and a 10.8% increase in the Companys handbag
businesses.  The challenging retail environment and continued stress in the
macro-economic marketplace, particularly the department store channel, resulted
in declines in most of the Companys Wholesale businesses.  Net
sales in the Companys Consumer Direct segment increased $1.8 million, or 4.2%,
to $43.0 million for the three months ended June 30, 2008, from $41.2 million
for the three months ended June 30, 2007.  Comparable store sales increased
1.3%, or $0.5 million, while sales related to new stores opened in 2008, and
that portion of 2008 sales for stores not open for all of 2007, increased by
$1.0 million for the three months ended June 30, 2008 compared to the three
months ended June 30, 2007.  Comparable stores are defined as new stores
that are open for longer than thirteen months.  A store that stops
operations is included in the comparable sales calculation through the date of
closing. The Company closed one
full-priced retail store, while continuing its expansion in Company Stores by
opening five stores during the three months ended June 30, 2008. As the Company
has increased the amount of specific made for Company Store product and
focused merchandising on key assortments, sales have improved at its Company
Store locations.In its full-priced
retail stores, the Company standardized assortments and modified price points to
align the price-value relationship of the Companys brands, which the Company
believes resulted in improved operating performance as the quarter progressed.
 The Company continues to review its real estate portfolio for both its
full-priced retail and Company Stores.  LICENSING REVENUE:  Royalty revenue decreased $0.3 million,
or 3.3%, to $10.3 million for the three months ended June 30, 2008 from $10.6
million for the three months ended June 30, 2007.  The decrease in
licensing revenues was primarily attributable to a reduction in sportswear
royalties from an amendment to the Companys licensing agreement relating to its
mens sportswear businesses that terminated December 31, 2007 offset by
incremental royalties received from existing licensees and the launch of the
Le Tigrebrand.  As mentioned in the section entitled Net Sales,
the Company has begun shipping mens sportswear, effectively transitioning the
licensing model to an in-house operation.  GROSS
PROFIT:  Consolidated gross profit, as a percentage of net revenues,
decreased to 41.4% for the three months ended June 30, 2008 from 44.3% for the
three months ended June 30, 2007.  The decrease, as a percentage of net
revenues, was primarily the result of a decrease in the Wholesale and Consumer
Direct segment margins, partially offset by the sales and revenue mix shifting
to Consumer Direct and Licensing as a percentage of total sales.  The
Consumer Direct segment, which operates at a higher gross profit level than the
Wholesale segment, had increased revenues as a percentage of net revenues of
38.7% for the three months ended June 30, 2008 compared to 34.7% for the three
months ended June 30, 2007, while the Wholesale segment revenues as a percentage
of net revenues decreased to 52.1% for the three months ended June 30, 2008 from
56.4% for the three months ended June 30, 2007.  The decrease in the
Wholesale segment margins was primarily due to soft sell-thrus and higher
dilution from a promotional department store environment.  The revenues in
the Licensing segment, which carries no cost of goods sold, increased as a
percentage of revenue to 9.2% for the three months ended June 30, 2008 compared
to 8.9% for the three months ended June 30, 2007.  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:  Selling,
general and administrative (SG&A) expenses, including warehousing and
receiving expenses, increased $0.2 million to $49.1 million for the three months
ended June 30, 2008 from $48.9 million for the three months ended June 30, 2007.
 The increase in SG&A expenses was primarily attributable to the
Companys investment in the development of mens sportswear offset by a
reduction in variable expenses from sales declines within the Wholesale segment.
 In addition, the Consumer Direct segment, which carries a higher SG&A
expense level then the Wholesale and Licensing segments, represented a greater
portion of revenues compared to the prior period.  As a result, the Company
lost leverage as SG&A expenses, as a percentage of net revenues, increased
to 44.2% for the three months ended June 30, 2008 from 41.1% for the three
months ended June 30, 2007.  INTEREST AND OTHER INCOME:  Interest and other income
decreased $1.5 million, or 92.5%, to approximately $0.1 million for the three
months ended June 30, 2008, as compared to the three months ended June 30, 2007,
primarily due to  18    lower
average cash balances and rates of return on investments as well as a writedown
to certain of the Companys marketable securities of $0.2 million.  The
Company has an investment in one of its licensees which is currently $3.2
million below cost.  The unrealized loss for the investment has been
recorded in the Condensed Consolidated Statement of Changes in Shareholders
Equity as it has been evaluated to be temporary.  The Company will continue
to review the investment in subsequent periods to determine if an
other-than-temporary impairment exists.  INCOME
TAXES:The Companys effective tax rate decreased to (30.3)% for
the three months ended June 30, 2008 from 38.5% for the three months ended June
30, 2007.  The decrease in the Companys tax rate is a result of the tax
benefit from the Companys net loss offset by the impact of interest and
penalties on income tax reserves.  NET
(LOSS)/INCOME:  As a result of the foregoing, the Company recorded a net
loss of $2.1 million for the three months ended June 30, 2008 ((1.8)% of net
revenues) compared to net income of $3.3 million (2.8% of net revenues) for the
three months ended June 30, 2007.  Six
Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007  REVENUES:  Net revenues decreased $14.7 million, or 5.9%, to
$233.6 million for the six months ended June 30, 2008 from $248.3 million for
the six months ended June 30, 2007.  The decrease in revenues occurred in
the Companys Wholesale segment as further described below in the section
entitled NET SALES.  NET
SALES: Wholesale net sales (excluding sales to the Companys Consumer Direct
business segment) decreased $18.1 million, or 12.0%, to $132.0 million, for the
six months ended June 30, 2008 from $150.1 million for the six months ended June
30, 2007.  The decrease is primarily due to a decline in sales across the
Companys branded footwearbusinesses, offset by incremental sales from
the Companys in-house launch of its mens sportswear collections previously
licensed and a 9.9% increase in the Companys handbag businesses.  The
challenging retail environment and continued stress in the macro-economic
marketplace, as well as generally softer sell-thrus compared to the prior year,
resulted in declines in most of the Companys Wholesale businesses.  Net
sales in the Companys Consumer Direct segment increased $3.4 million, or 4.3%,
to $81.5 million for the six months ended June 30, 2008, from $78.1 million for
the six months ended June 30, 2007.  Comparable store sales increased 2.3%,
or $1.6 million, while sales related to new stores opened in 2008, and that
portion of 2008 sales for stores not open for all of 2007, increased by $0.7
million for the six months ended June 30, 2008 compared to the six months ended
June 30, 2007.  Comparable stores are defined as new stores that are open
for longer than thirteen months.  A store that stops operations is included
in the comparable sales calculation through the date of closing. The Company opened two full-priced retail
stores and closed eight, while continuing its expansion in Company Stores by
opening six stores during the six months ended June 30, 2008.  As the
Company has increased the amount of specific made for Company Store product
and focused merchandising on key assortments, sales have improved at its Company
Store locations.In its full-priced
retail stores, the Company standardized assortments and modified price points to
align the price-value relationship of the Companys brands, which the Company
believes resulted in improved operating performance.  The Company continues
to review its real estate portfolio for both its full-priced retail and Company
stores.  LICENSING REVENUE:  Royalty revenue remained flat at $20.1
million for the six months ended June 30, 2008 as compared to the six months
ended June 30, 2007.  Incremental royalties received from existing
licensees and the launch of the Le Tigrebrand were offset by a decrease
in licensing revenues attributable to a reduction in sportswear royalties from
an amendment to the Companys licensing agreement relating to its mens
sportswear businesses that terminated December 31, 2007.  As mentioned in
the section entitled Net Sales, the Company has begun shipping mens
sportswear, effectively transitioning the licensing model to an in-house
operation.   19    GROSS
PROFIT:  Consolidated gross profit, as a percentage of net revenues,
decreased to 41.2% for the six months ended June 30, 2008 from 42.4% for the six
months ended June 30, 2007.  The decrease, as a percentage of net revenues,
was primarily the result of a decrease in the Wholesale and Consumer Direct
segment margins, partially offset by the sales and revenue mix shifting to
Consumer Direct and Licensing as a percentage of total sales.  The Consumer
Direct segment, which operates at a higher gross profit level than the Wholesale
segment, had increased revenues as a percentage of net revenues of 34.9% for the
six months ended June 30, 2008 compared to 31.5% for the six months ended June
30, 2007, while the Wholesale segment revenues as a percentage of net revenues
decreased to 56.5% for the six months ended June 30, 2008 from 60.4% for the six
months ended June 30, 2007.  The decrease in the Wholesale segment margins
was primarily due to soft sell-thrus and higher dilution from a promotional
department store environment.  The revenues in the Licensing segment, which
carries no cost of goods sold, increased as a percentage of revenue to 8.6% for
the six months ended June 30, 2008 compared to 8.1% for the six months ended
June 30, 2007.  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:  SG&A
expenses, including warehousing and receiving expenses, increased $1.1 million
to $98.2 million for the six months ended June 30, 2008 from $97.1 million for
the six months ended June 30, 2007.  The increase in SG&A expenses was
primarily attributable to the Companys investment in the development of mens
sportswear and marketing expenses associated with the Companys twenty-fifth
anniversary campaign, offset by a reduction in variable expenses from sales
declines within the Wholesale segment.  As a percentage of net revenues,
SG&A expenses increased to 42.0% for the six months ended June 30, 2008 from
39.1% for the six months ended June 30, 2007 from the additional costs mentioned
above, loss of leverage on the decrease in Wholesale sales and the greater
portion of revenues from the Consumer Direct segment which carries a higher
SG&A expense level than the Wholesale and Licensing segments.  INTEREST AND OTHER INCOME:  Interest and other income
decreased $2.4 million, or 85.4%, to approximately $0.4 million for the six
months ended June 30, 2008, as compared to the six months ended June 30, 2007,
primarily due to lower average cash balance and rates of return on investments
as well as a writedown to certain of the Companys marketable securities of $0.8
million.  The
Company has an investment in one of its licensees which is currently $3.2
million below cost.  The unrealized loss for the investment has been
recorded in the Condensed Consolidated Statement of Changes in Shareholders
Equity as it has been evaluated to be temporary.  The Company will continue
to review the investment in subsequent periods to determine if an
other-than-temporary impairment exists.  INCOME
TAXES:The Companys effective tax rate decreased to (18.9)% for
the six months ended June 30, 2008 from 38.5% for the three months ended June
30, 2007.  The decrease in the Companys tax rate is a result of the tax
benefit from the Companys net loss offset by the impact of interest and
penalties on income tax reserves.  NET
(LOSS)/INCOME:  As a result of the foregoing, the Company recorded a net
loss of $1.2 million for the six months ended June 30, 2008 ((0.5)% of net
revenues) compared to net income of $6.7 million (2.7% of net revenues) for the
six months ended June 30, 2007.  New
Accounting Pronouncements  In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133 (SFAS 161).  SFAS 161
amends and expands the disclosure requirements of SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities.SFAS 161 is effective for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008.  The Company is
currently evaluating the requirements and impact of SFAS 161 on the
Companys consolidated financial statements.  In April 2008, the FASB issued FASB Staff Position FAS 142-3,
Determination of the Useful Life of Intangible Assets (FSP 142-3).
 FSP 142-3 amends the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under SFAS No. 142, Goodwill and Other  20    Intangible Assets (SFAS 142).  The intent of FSP
142-3 is to improve the consistency between the useful life of a recognized
intangible asset under SFAS 142 and the period of expected cash flows used to
measure the fair value of the asset under SFAS No. 141R Business
Combinations(SFAS 141R) and other applicable accounting literature.
 FSP 142-3 is effective for financial statements issued for fiscal years
beginning after December 15, 2008 and must be applied prospectively to
intangible assets acquired after the effective date.  The Company is
currently evaluating the impact of FSP 142-3 on the Companys consolidated
financial statements.  In May 2008, the FASB issued SFAS No. 162, Hierarchy of
Generally Accepted Accounting Principles(SFAS 162).  This statement
is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in
preparing financial statements of nongovernmental entities that are presented in
conformity with GAAP.  This statement will be effective sixty days
following the U.S. Securities and Exchange Commissions approval of the Public
Company Accounting Oversight Board amendment to AU Section 411, The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting
Principles.  The Company is currently evaluating the impact of SFAS
162 on the Companys consolidated financial statements.  Related Party Transactions  The Company has an exclusive license agreement with Iconix Brand
Group, Inc. and its trademark holding company, IP Holdings, LLC (Iconix), to
use the Bongo trademark in connection with the manufacture, sale and
distribution of womens, mens and childrens footwear in certain territories.
 The Chief Executive Officer and Chairman of Iconix is the brother of the
Companys Chairman and Chief Creative Officer.  The term of the agreement
is through December 31, 2010.  Management believes that the license
agreement with Iconix was entered into at arms-length.  During these
periods, the Company is obligated to pay Iconix a percentage of net sales based
upon the terms of the agreement.  The Company recorded approximately
$284,000 and $573,000 in aggregate royalty and advertising expense under the
agreement for the three- and six-month periods ended June 30, 2008,
respectively.  The Company recorded approximately $240,000 and $511,000 in
aggregate royalty and advertising expense under the agreement for the three- and
six-month periods ended June 30, 2007, respectively.  The Company recorded expenses of approximately $91,000 and
$266,000 for the three and six months ended June 30, 2008, respectively, to a
third-party aviation company which hires and uses an aircraft partially owned by
Emack LLC, a company which is wholly owned by the Companys Chairman and Chief
Creative Officer.  During the three and six months ended June 30, 2007, the
Company recorded expenses of approximately $114,000 and $229,000, respectively,
for hire and use of aircraft partially owned by Emack LLC. Management believes
that all transactions were made on terms and conditions similar to or more
favorable than those available in the marketplace from unrelated parties.  Liquidity and Capital Resources  The Company uses cash from operations as the primary source of
financing for its capital expenditures, seasonal requirements and paying its
quarterly dividends.  Cash requirements vary from time to time as a result
of the timing of the receipt of merchandise from suppliers, the delivery by the
Company of merchandise to its customers, and the level of accounts receivable
and due from factors balances.  At June 30, 2008 and December 31, 2007
working capital was $117.0 million and $139.4 million, respectively.  Cash provided by operating activities was $12.3 million for the
six months ended June 30, 2008, compared to $13.7 million for the six months
ended June 30, 2007. The decrease in cash flows provided by
operations is primarily attributable to a decrease in net income and the timings
of receivables and payables.  Net cash used in investing activities totaled $5.9 million for the
six months ended June 30, 2008 compared to $7.8 million for the six months ended
June 30, 2007.  The decrease was primarily attributable to a $3.7 million
decrease in capital expenditures during the six months ended June 30, 2008
compared to June 30, 2007.  Included in capital expenditures for the six
months ended June 30, 2008 and 2007 were approximately $2.4 million and $2.6
million,  21    respectively, for amounts associated with furniture, fixtures and
leasehold improvements for retail store expansion and $3.0 million in costs for
the implementation of the SAP retail and POS systems in 2007.  The Company
also made payments of $3.1 million for intangible assets, of which $2.5 million
is related to achieving one of the performance targets within the Le TigreAsset Purchase Agreement Amendment, during the six months ended June 30,
2008 compared to $0.5 million during the six months ended June 30, 2007.
 In addition, the Company did not purchase any marketable securities during
the six months ended June 30, 2008, compared to $0.8 million in 2007.  Net cash used in financing activities was $24.2 million for the
six months ended June 30, 2008 compared to $3.8 million for the six months ended
June 30, 2007.  The increase was primarily attributable to $20.0 million
used to repurchase 1,282,000 treasury shares during the six months ended June
30, 2008 as compared to no repurchases during the six months ended June 30,
2007.  The Company also paid dividends of $3.6 million during the six
months ended June 30, 2008 compared to $7.3 million during the six months ended
June 30, 2007.  In addition, the Company had received proceeds of $0.1
million during the six months ended June 30, 2008 related to stock option
exercises as compared to $3.3 million received during the three months ended
June 30, 2007.  The Company has a Revolving Credit Facility with various lenders,
which provides up to $100.0 million to finance working capital requirements and
letters of credit to finance the Company's inventory purchases.  During the
six months ended June 30, 2008, the Company did not borrow under the Revolving
Credit Facility.  Amounts available under the Revolving Credit Facility
were reduced by $5.8 million of standby and open letters of credit.  The Company believes that it will be able to satisfy its current
expected cash requirements for 2008, including requirements for its in-house
sportswear infrastructure, enhanced information systems, store expansions and
the payments of its quarterly cash dividend, primarily with cash flow from
operations and cash on hand.  The Company did not have any off-balance
sheet arrangements as of June 30, 2008.  The foregoing commentary should be considered to fall within the
coverage of the Safe Harbor Statement under the Private Securities
Litigation reform Act of 1995 included in this report.  Item 3.
 Quantitative and Qualitative Disclosures About Market Risk  The Company has marketable securities that contain triple A
rated auction rate debt obligations and a preferred share close end fund that
are substantially all insured.  All of the Companys auction rate
securities have failed at auction as a result of illiquidity and imbalance in
order flow within the market.  A failed auction is not an indication of an
increased credit risk or a reduction in the underlying collateral; however,
parties wishing to sell securities could not do so.  Based on current
market conditions, it is not known when or if the capital markets will come back
into balance to achieve successful auctions for these securities.  If these
auctions continue to fail, it could result in the Company holding securities
beyond their next scheduled auction reset dates and will limit the liquidity of
these investments.  Based on the Companys expected operating cash flows,
and other sources and uses of cash, the Company does not anticipate that the
lack of liquidity on these investments will affect its ability to execute its
current business plan.  The Company is exposed to currency exchange rate risks with
respect to its inventory transactions denominated in Euro.  Business
activities in various currencies expose the Company to the risk that the
eventual net dollar cash flows from transactions with foreign suppliers
denominated in foreign currencies may be adversely affected by changes in
currency rates.  The Company manages these risks by utilizing foreign
exchange contracts.  The Company does not enter into foreign currency
transactions for speculative purposes.  At June 30, 2008, the Company had no forward contracts
outstanding.  The Companys earnings may also be affected by changes in
short-term interest rates as a result of borrowings that may be made under its
credit facilities.  A two or less percentage point increase in interest
rates affecting the Companys credit facilities would not have had a material
effect on the Companys net income.   22    The Company sources a significant amount of product from China and
is subject to foreign currency exposure. If the Yuan is allowed to float freely
against other foreign currency, a two percent change in exchange rates could
have a material effect on the cost of future inventory purchases to be
transacted by the Company.   Item
4.  Controls and Procedures  Evaluation of disclosure controls and procedures  The Companys Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the Companys disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 (the Exchange Act), as amended) as of the end of the
period covered by this quarterly report, and have concluded that the Companys
disclosure controls and procedures were effective and designed to ensure that
all material information required to be disclosed by the Company in reports
filed or submitted under the Exchange Act is (1) recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and (2) accumulated and communicated to the
Companys management, including the Companys Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosures.  Changes in internal control over financial reporting  There were no changes in the Companys internal controls over
financial reporting during the period covered by this report that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.   Part II - OTHER
INFORMATION   Item 1. Legal Proceedings.  There have been no
material changes during the quarterly period ended June 30, 2008 from the legal
proceedings previously disclosed in the Companys Annual Report on Form 10-K for
the year ended December 31, 2007 and within the Companys Form 10-Q for the
quarterly period ended March 31, 2008.   Item
1A.  Risk Factors.  There have been no material changes during
the quarterly period ended June 30, 2008 from the risk factors previously
disclosed in the Companys Annual Report on Form 10-K for the year ended
December 31, 2007.   23     Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds.  During
the three months ended June 30, 2008, the Company repurchased 868,600 shares of
its own stock, as presented in the following table:  Period
(a) Total
Number of Shares (or Units) Purchased
(b) Average
Price Paid per Share
(or
Unit)
(c) Total
Number of Shares (or Units) Purchased as Part of Publicly Announced Plans
or Programs
(d) Maximum
Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be
Purchased Under the Plans or Programs (1)April
2008
182,100
$17.00
182,100
4,096,500May 2008
347,700
$15.44
347,700
3,748,800June
2008
338,800
$13.88
338,800
3,410,000Total
868,600
$15.16
868,800
3,410,000  (1) As
of December 31, 2007, the remaining amount of shares that could be repurchased
was 692,000.  On March 3, 2008, the Companys Board of Directors increased
the authorization for the Companys stock buyback plan by 4,000,000 shares to
4,692,000 shares available for repurchase.  As of June 30, 2008, the
remaining amount of shares that could be repurchased was 3,410,000.   Item
3. Defaults
Upon Senior Securities.  None   Item
4. Submission
of Matters to a Vote of Security Holders.  (a) Kenneth Cole Productions, Inc.s Annual Meeting of Shareholders
was held on May 29, 2008.  (b) Election of Directors  All nominees were elected through proxies
solicited pursuant to Regulation 14A under the Securities and Exchange Act of
1934, as amended.  There was no solicitation in opposition to managements
nominees as listed in the Proxy Statement, and each of the nominees was elected
to hold office until the next Annual Meeting of Shareholders.  (c) Matters voted on at the Annual Meeting of Shareholders
included: (i) the election of directors and (ii) the ratification of the
selection of the Independent Registered Public Accounting Firm for the 2008
fiscal year.  (i)  Election of directors:  FOR
AGAINST/ABSTAIN
BROKER NON-VOTEKenneth D.
Cole
89,518,976
403,350
0Martin E.
Franklin
83,546,091
6,376,235
0Jill
Granoff
89,580,318
342,008
0Robert C.
Grayson
9,073,761
743,595
0Denis F.
Kelly
9,077,954
739,402
0Philip R.
Peller
89,210,159
712,167
0   24    Holders of 9,817,356 shares of Class A Common Stock, and 8,010,497
shares of Class B Common Stock, constituting approximately 94.8% of the shares
entitled to vote, were present in person or by proxy at the Annual Meeting of
Shareholders.  Each record holder of Class A Common Stock is entitled to
one vote per share, and each record holder of Class B Common Stock is entitled
to 10 votes per share.  Holders of Class A Common Stock voted separately to
elect Robert C. Grayson and Denis F. Kelly.  (ii)
 Ratification of the Companys Independent Registered Public Accounting
Firm:  With regard to the ratification of the appointment of Ernst &
Young LLP as the Companys Independent Registered Public Accounting Firm, the
results were as follows:  FOR
AGAINST
ABSTAIN
BROKER NON-VOTE88,545,140
1,373,546
3,639
0   Item
5. Other
Information.  None  Item
6. Exhibits.  31.1
Certification of Chief Executive Officer pursuant to
Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
Certification of Chief Financial Officer pursuant to
Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.  25     SIGNATURES   Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.   Kenneth
Cole Productions, Inc. Registrant    August
7, 2008 /s/
DAVID P. EDELMAN David
P. Edelman Chief
Financial Officer   26


Exhibit 31.1  CERTIFICATION OF CHIEF EXECUTIVE OFFICER  I, Jill
Granoff, certify that:  1.
 I have reviewed this quarterly report on Form 10-Q of Kenneth Cole
Productions, Inc.;  2.
 Based on my knowledge, the report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by the report;  3.
 Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in the report;  4.
 The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:  (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;  (b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;  (c) Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and  (d) Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting;
and       5.
 The registrants other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent functions):  (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal control
over financial reporting.     By: /s/
JILL GRANOFF -------------------------------------- Jill
Granoff Chief
Executive Officer    Date:  August 7,
2008                            Exhibit
31.2  CERTIFICATION OF CHIEF FINANCIAL OFFICER  I,
David P. Edelman, certify that:  1.
 I have reviewed this quarterly report on Form 10-Q of Kenneth Cole
Productions, Inc.;  2.
  Based on my knowledge, the report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the report;  3.
 Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in the report;  4.
 The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:  (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;  (b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;  (c) Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and  (d) Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting;
and       5.
 The registrants other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent functions):  (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal control
over financial reporting.     By: /s/
DAVID P. EDELMAN ---------------------------------------- David
P. Edelman Chief
Financial Officer     Date:  August 7,
2008                           Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Quarterly Report of Kenneth Cole
Productions, Inc. (the Company) on Form 10-Q for the period ending June 30,
2008 as filed with the Securities and Exchange Commission on the date hereof
(the Report), I, Jill Granoff, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the
Sarbanes-Oxley Act of 2002, that: (1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended; and (2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.  /s/
JILL GRANOFF  Jill
GranoffChief Executive OfficerKenneth Cole Productions, Inc August
7, 2008            Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Quarterly Report of Kenneth Cole
Productions, Inc. (the Company) on Form 10-Q for the period ending June 30,
2008 as filed with the Securities and Exchange Commission on the date hereof
(the Report), I, David P. Edelman, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the
Sarbanes-Oxley Act of 2002, that: (1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended; and (2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.  /s/
DAVID P. EDELMAN  David
P. EdelmanChief Financial OfficerKenneth Cole Productions, Inc.
August 7, 2008