<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC   20549
                                       
                                   FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
        FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
                             OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
    FOR THE TRANSITION PERIOD FROM __________ TO __________.

COMMISSION FILE NUMBER: 0-20850

                                 HAGGAR CORP.
            (Exact name of registrant as specified in the charter)

                NEVADA                                75-2187001
     (State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)              Identification Number)

                              6113 LEMMON AVENUE
                             DALLAS, TEXAS  75209
                   (Address of principal executive offices)

      Registrant's telephone number, including area code:  (214) 352-8481
                                       
          Securities registered pursuant to Section 12(b) of the Act:

                                                   NAME OF EACH EXCHANGE ON
     TITLE OF EACH CLASS                                  REGISTERED
 ----------------------------                  ---------------------------------
         Common stock                            Nasdaq National Market System
 ($0.10 par value per share)

          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 Regulations 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. [X]

As of December 15, 1997 there were 8,551,382 shares of common stock 
outstanding.  The aggregate market value of the 7,472,820 shares of the 
common stock of Haggar Corp. held by nonaffiliates on such date (based on the 
closing price of these shares on the Nasdaq National Market System) was 
approximately $119,565,120.

                      DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III is incorporated by reference from the 
Registrant's definitive proxy statement to be filed with the Commission 
pursuant to Regulation 14A not later than 120 days after the end of the 
fiscal year covered by this report.

<PAGE>










                      THIS PAGE INTENTIONALLY LEFT BLANK.








                                        2

<PAGE>
                                    PART I

ITEM 1.BUSINESS

INTRODUCTION.

Haggar Corp., together with its subsidiaries (collectively the "Company"), 
designs, manufactures, imports and markets casual and dress men's apparel 
products including pants, shorts, suits, sportcoats and shirts.  Products are 
offered in a wide variety of styles, fabrics, colors and sizes.

The Company's products are sold primarily through approximately 7,000 retail 
stores operated by its customers, which include major department stores, 
specialty stores and mass market retailers throughout the United States.  The 
Company offers its premium apparel products under the Haggar-Registered 
Trademark- brand name and offers a more moderately priced line of products 
under its Reed St. James-Registered Trademark- brand name through its mass 
market retailer division, The Horizon Group. The Company owns several other 
trademarks under which it markets or has marketed its products. In addition, 
the Company offers retailers quality products bearing the retailer's own 
label.

In each of the last three fiscal years the Company has derived approximately 
99% of its income from the sale of men's apparel products. Additional income 
is derived from the licensing of certain trademarks to other manufacturers. 
In 1995, as part of its strategic growth objectives, the Company began 
opening and operating retail stores located in retail outlet malls throughout 
the United States. As of September 30, 1997, the Company had opened 41 such 
stores which market first quality Company products to the general public. 
These stores also serve as a retail marketing laboratory for the Company.

The Company was established in 1926 by J. M. Haggar, Sr., and has built its 
reputation by offering high quality, "ready to wear" men's apparel at 
affordable prices through innovations in product design, marketing and 
customer service.  Haggar Clothing Co. is the primary operating subsidiary.  
Both Haggar Corp. and Haggar Clothing Co. are incorporated in Nevada.

PRODUCTS AND MAJOR BRANDS.

The Company's apparel products are manufactured with a wide array of fabrics 
that emphasize style, comfort, fit and performance.  The Company is well 
known for its use of "performance fabrics" that maintain a fresh, neat 
appearance. The Company's product lines are currently dominated by natural 
fiber (wool or cotton) and blended (polyester/wool or polyester/rayon) 
fabrics, although the Company also produces some apparel using a single 
synthetic (polyester or rayon) fabric.

A significant portion of the Company's apparel lines consist of basic, 
recurring styles, which the Company believes are less susceptible to "fashion 
obsolescence", as compared with higher fashion apparel lines.  Thus, while 
the Company strives to offer current fashions and styles, the bulk of its 
product lines change relatively little from year to year.  This consistency 
in product lines enables the Company to operate on a cost-efficient basis and 
to more accurately forecast the demand for particular products.

HAGGAR-REGISTERED TRADEMARK-.  The Company's Haggar brands represented 77.3% 
of total apparel sales in fiscal 1997.  These brands receive widespread 
recognition among United States consumers for high quality, affordable men's 
apparel. The full range of products offered by the Company is marketed under 
these brands, including dress and casual pants, sportcoats, suits, shirts and 
shorts. The Company has developed specific product lines under these brands, 
intended to keep the Company in the forefront of the trend among men toward 
more casual clothing, while maintaining the Company's traditional strength in 
men's dress apparel. Examples of these lines include Haggar Wrinkle-Free 
Cottons-Registered Trademark- and Haggar City CasualsTM. Haggar Wrinkle-Free 
Cottons-Registered Trademark- offer all the comfort features of 100% cotton 
pants and maintain their neat appearance, without the need for ironing or dry 
cleaning. Haggar City CasualsTM is a fashionable line of coordinated coats, 
vests, pants and shirts designed to meet the need for "business casual" and 
casual social dressing.  The Haggar brand is also licensed to manufacturers 
of related apparel in categories outside of the core product lines of the 
Company.

                                     3

<PAGE>

Haggar branded products are sold nationwide primarily in major department 
stores, including J.C. Penney, Mercantile Department Stores, May Department 
Stores, Federated Department Stores, Mervyn's California, Belk Department 
Stores and Kohl's Department Stores.  The Company also markets its Haggar 
branded men's clothing through its own retail stores located in 41 outlet 
malls throughout the United States.

THE HORIZON GROUP.  The Company's mass retailer division, The Horizon Group, 
markets Reed St. James-Registered Trademark- products including dress 
pants, casual pants, shorts, suits, sportcoats and shirts.  Reed St. James 
products, which are offered at lower price points than Haggar brand products, 
have been generally sold to mass market retailers, such as Wal-Mart, Bradlees 
and Venture. The Horizon Group markets Mustang-Registered Trademark- brand 
jeans (featuring basic and fashion cotton jeans and shorts) and Reed Stretch 
Jeans. Additionally, the Horizon Group manages the licensing of products 
bearing the Reed St. James brand.

In addition to manufacturing products under its own labels, the Company also 
manufactures men's apparel for certain of its customers under the individual 
store's proprietary label.  The Company's private label products are 
primarily sold to major department stores and mass market merchandisers, 
including J.C. Penney, Wal-Mart and Sears.

INTRODUCTION OF NEW PRODUCTS.

The Company is emphasizing the introduction of new products in order to 
capitalize on its brand name recognition and retailer relationships.  While 
the Company has offered casual products in the past, it has increased its 
efforts in this category through aggressive marketing and expansion of its 
line of Haggar Wrinkle-Free Cottons-Registered Trademark-, including its 
Ultimate Pant-TM-, as well as Haggar City Casuals-TM-. The Company has 
further expanded its product base in 1997 through the release of the Black 
Label-TM- and Cotton Flex-TM- products.  The Company continues to emphasize 
its lines of shirts designed to complement its casual product lines.  While 
there is substantial competition in these markets, the Company believes that 
it is well-positioned to take advantage of these market opportunities.

DEPENDENCE ON KEY CUSTOMERS.

The number of major apparel retailers has decreased in recent years, and the 
retail apparel industry continues to undergo consolidation.  The Company's 
five largest customers accounted for 49.4%, 50.8%, and 50.7% of net sales 
during the fiscal years ending September 30, 1997, 1996 and 1995, 
respectively.  The Company's largest current customer, J.C. Penney Company, 
Inc., accounted for 27.3%, 26.3% and 28.7% of the Company's net sales during 
the fiscal years ending September 30, 1997, 1996 and 1995, respectively. No 
other customer accounted for more than 10% of consolidated revenues.  The 
loss of the business of one or more of the Company's largest customers could 
have a material adverse effect on the Company's results of operations.  The 
Company has no long-term commitments or contracts with any of its customers.

COMPETITION.

The apparel industry is highly competitive due to its fashion orientation, 
its mix of large and small producers, the flow of imported merchandise and a 
wide variety of retailing methods. Competition has been exacerbated by 
consolidations and closings of major department store groups. The Company has 
many diverse competitors, some of whom have greater marketing and financial 
resources than the Company.  Intense competition in the apparel industry can 
result in significant discounting and lower gross margins. The Company is the 
market leader in sales of men's dress pants, custom-fit suits (separately 
sized pants and matching jackets which may be purchased together to form a 
suit requiring little or no alteration) and sport coats, and holds the number 
two market share in men's casual pants.

                                    4

<PAGE>

The principal elements of competition in the apparel industry include style, 
quality and price of products, brand loyalty, customer service and 
advertising. The Company's product innovations such as Haggar Wrinkle-Free 
Cottons-Registered Trademark- and Ultimate Pant-TM- as well as value-added 
services such as floor-ready merchandise, electronic data interchange, 
fixturing and concept shops position it to compete as a market leader. The 
Company also believes that its brand recognition, merchandise with relatively 
low vulnerability to changing fashion trends and affordable pricing enhance 
its competitive position in the apparel industry. Additionally, it feels its 
national advertising campaign promotes consumer demand for its products and 
enhances its brand and Company image.

DESIGN AND MANUFACTURING.

With limited exceptions, products sold by the Company's various divisions are 
manufactured to the designs and specifications (including fabric selections) 
of designers employed by those divisions.

During fiscal 1997, approximately 25% of the Company's products (measured in 
units) were produced in the United States, with the balance manufactured in 
foreign countries.  Facilities operated by the Company accounted for all of 
its domestic-made products.  A portion of all product lines manufactured by 
the Company are produced domestically with the exception of shirts.  
Approximately 22% of the Company's foreign-made products were manufactured by 
facilities owned by the Company in Mexico and the Dominican Republic, with 
the remaining 78% manufactured by unaffiliated companies in the Far East, 
Asia, South America, Central America, Mexico and the Dominican Republic.

In 1996, the Company announced its plans to restructure its worldwide 
manufacturing capacity by consolidating its three Texas sewing operations 
into one facility and shifting a portion of the production to off-shore 
locations. This restructuring was completed in fiscal 1997.  It is 
anticipated that the restructuring will result in approximately 15% of the 
Company's products being manufactured in the United States during fiscal 
1998, with the other 85% manufactured in foreign countries.  (See Item 7.- 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations).

The Company's foreign sourcing operations are subject to various risks of 
doing business abroad, including currency fluctuations, quotas and other 
regulations relating to imports, natural disasters and, in certain parts of 
the world, political or economic instability.  Although the Company's 
operations have not been materially adversely affected by any of such factors 
to date, any substantial disruption of its relationships with its foreign 
suppliers could adversely affect its operations.  Some of the Company's 
imported merchandise is subject to United States Customs duties.  In 
addition, bilateral agreements between the major exporting countries and the 
United States impose quotas which limit the amounts of certain categories of 
merchandise that may be imported into the United States.  Any material 
increase in duty levels, material decrease in quota levels or material 
decrease in available quota allocations could adversely affect the Company's 
operations.

RAW MATERIALS.

Raw materials used in manufacturing operations consist mainly of fabrics made 
from cotton, wool, synthetics and blends of synthetics with cotton and wool. 
These fabrics are purchased principally from major textile producers located 
in the United States.  In addition, the Company purchases such items as 
buttons, thread, zippers and trim from a large number of other suppliers.  
Five vendors supplied approximately 56% of the Company's fabric and trim 
requirements during the fiscal year ended September 30, 1997. The Company has 
no long-term contracts with any of its suppliers, but does not anticipate 
substantial shortages of raw materials in 1998. 

                                      5

<PAGE>

TRADEMARKS.

The Company owns many federal trademark registrations and has pending several 
other trademark applications in the United States Patent and Trademark 
Office. The Company has also registered or applied for registration of a 
number of trademarks for use on a variety of apparel items in various foreign 
countries. The Company regards its trademarks and other proprietary rights as 
valuable assets and believes that they have significant value in the 
manufacturing and marketing of its products.

The Company seeks to capitalize on consumer recognition and acceptance of 
both the Haggar and Reed St. James brands by licensing, both domestically and 
internationally, the use of these trademarks on a variety of products. 
Typically, the licensee's agreement with the Company gives it the right to 
produce, market and sell specified products in a particular country or region 
under one or more of the Company's trademarks. For example, the Company has 
granted exclusive domestic licenses to unaffiliated manufacturers for the 
production and marketing of men's leather goods, neckwear, sweaters, hosiery 
and eyewear under the "Haggar" trademark.

SEASONALITY.

Historically, the Company's business has been seasonal, with higher sales and 
income during its second and fourth quarters, just prior to and during the 
two peak retail selling seasons for spring and fall merchandise. (See Item 7, 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations - Seasonality.)

BACKLOG.

A substantial portion of the Company's net sales is based on orders for 
immediate delivery, or so-called "soft-planning orders", submitted by apparel 
retailers (which do not constitute purchase commitments).  An analysis of 
backlog is not, therefore, necessarily indicative of future net sales. 
Retailers' use of such soft-planning orders increases the difficulty of 
forecasting demand for the Company's products.

EMPLOYEES.

The Company employs approximately 2,600 persons domestically and 1,700 
persons in foreign countries.  In 1997, approximately 3,300 employees were 
engaged in manufacturing operations and the remainder were employed in 
executive, marketing, wholesale and retail sales, product design, 
engineering, accounting, distribution and purchasing activities.  The Company 
consolidated its three Texas sewing operations into one facility in 1997, 
which resulted in the termination of the employment of a number of its 
employees engaged in manufacturing operations.  None of its domestic 
employees are covered by a collective bargaining agreement with any union.  
While the Company is not a party to any collective bargaining agreements 
covering its foreign employees, applicable labor laws may dictate minimum 
wages, fringe benefit requirements and certain other obligations.  The 
Company believes that relations with its employees are good.

ENVIRONMENTAL REGULATIONS.

Current environmental regulations have not had and, in the opinion of the 
Company, assuming the continuation of present conditions, will not have any 
material effect on the business, capital expenditures, earnings  or 
competitive position of the Company.

FINANCIAL INSTRUMENT DERIVATIVES.

The Company does not utilize financial instrument derivatives.

                                          6

<PAGE>

ITEM 2. PROPERTIES

The Company's principal executive offices are located at 6113 Lemmon Avenue, 
Dallas, Texas 75209.  The general location, use, approximate size and 
information with respect to the ownership or lease of the Company's principal 
properties are set forth below:

<TABLE>
<CAPTION>
                                                                  Approximate       Owned/          Lease
      Location                                Use               Square Footage      Leased        Expiration
      ------------------------------------------------------------------------------------------------------
      <S>                                <C>                    <C>                <C>            <C>

      Dallas, Texas                      Headquarters               443,000          Owned
      Dallas, Texas                      Warehouse                  157,000         Leased           1998
      Fort Worth, Texas                  Warehouse
                                            & Distribution          660,000          Owned
      Dallas, Texas                      Storage                     60,000          Owned
      Weslaco, Texas                     Fabric Cutting             115,000          Owned
      Weslaco, Texas (1)                 Excess Facility             95,000         Leased           1999
      Weslaco, Texas                     Warehouse                  137,000          Owned
      Edinburg, Texas                    Fabric Cutting &
                                            Manufacturing           121,000          Owned
      Leon, Mexico                       Manufacturing               39,000          Owned
      La Romana, Dom. Rep.               Manufacturing               41,000         Leased           2001
      Higuey, Dom. Rep.                  Manufacturing               13,000         Leased           2011
      Robstown, Texas (1)                Excess Facility             68,000          Owned
      Oklahoma City (1)                  Excess Facility             95,000         Leased           2001
      Various (42 locations) (2)         Retail Sales                90,000         Leased    1997 - 2003

</TABLE>
       
       
      (1) These properties were previously used by the Company as manufacturing
          plants but are no longer utilized by the Company.  The Company is
          profitably subleasing the property in Oklahoma City, Oklahoma to
          the U.S. Postal Service.
       
      (2) These properties are the Company's 41 retail stores located in outlet 
          malls throughout the United States and one outlet store which sells
          second quality products.  The retail stores range in size from
          approximately 2,700 to 4,400 square feet.
       
All of the properties owned by the Company are free from material 
encumbrances, except the Company's fabric cutting facility located at 
Weslaco, Texas, which is subject to a lien securing an industrial revenue 
bond financing in the amount of $2.8 million. The Company believes that its 
existing facilities are well maintained, in good operating condition and 
adequate for its present and anticipated levels of operations.

Future manufacturing needs are anticipated to be met through owned facilities 
and through the use of outside contractors.  The Company's Customer Service 
Center (CSC) in Fort Worth, Texas is expected to meet the Company's 
distribution requirements for the foreseeable future.
       
                                          7

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company has been named as a defendant in several legal actions arising 
from its normal business activities, including actions brought by certain 
terminated employees.  Although the amount of any liability that could arise 
with respect to these actions cannot be accurately predicted, the claims and 
damages alleged, the progress of the litigation to date, and past experience 
with similar litigation leads the Company to believe that any liability 
resulting from these actions will not individually or collectively have a 
material adverse effect on the financial position of the Company.

In addition, the Company has been named as a defendant in two legal actions 
arising out of the collapse of the roof of the Company's warehouse during the 
storm of May 5, 1995.  Although the amount of any liability that could arise 
with respect to such actions cannot be accurately predicted, the Company does 
not believe any such liability will have a material adverse effect on the 
financial position of the Company.

The Company maintains general liability, workers' compensation, and employers 
liability insurance.  The Company intends to pass the costs associated with 
lawsuits to its insurance carriers, under the applicable policies, if any, 
subject to the deductible limits and other provisions and exclusions of those 
policies.

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

None.
                                       
                                       8
                                       
<PAGE>

                                    PART II

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

The Company's Common Stock is traded on the Nasdaq National Market System 
under the symbol "HGGR."  The following table sets forth, for the fiscal 
quarters indicated, the high and low prices for the Common Stock as reported 
by the Nasdaq National Market System and the dividends paid per common share.

       1997                              FISCAL QUARTER
                 -------------------------------------------------------------
                    1st               2nd            3rd               4th
                 -------------------------------------------------------------
       High        18 3/4            17 3/4           15              15 1/2
       Low         14 1/2            11 7/8         11 1/2            11 5/8
       Dividend     $0.05             $0.05          $0.05             $0.05

       1996                              FISCAL QUARTER
                 -------------------------------------------------------------
                    1st               2nd            3rd               4th
                 -------------------------------------------------------------
       High        18 3/4              19           16 1/4            14 7/8
       Low         15 3/4            11 1/2         12 5/8            12 1/2
       Dividend     $0.05             $0.05          $0.05             $0.05

As of November 15, 1997, the Company had approximately 250 stockholders of 
record and approximately 3,600 beneficial owners.

                                           9

<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial information below should be read in 
conjunction with the consolidated financial statements of the Company and 
notes thereto and "Item 7, Management's Discussion and Analysis of Financial 
Condition and Results of Operations." The selected consolidated financial 
information for the five years ended September 30, 1997, is derived from 
financial statements of the Company which have been audited by Arthur 
Andersen LLP, independent public accountants.

<TABLE>
<CAPTION>

                                                                                          Year Ended September 30,
                                                                 1997            1996          1995           1994           1993
                                                             -----------    ------------   -----------    -----------    ----------
                                                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
       <S>                                                   <C>            <C>            <C>            <C>            <C>
       INCOME STATEMENT DATA:
       Net sales                                             $  406,030     $  437,942     $  448,532     $  491,235     $  394,059
       Cost of goods sold                                       287,434        315,351        324,699        345,846        285,540
       Restructuring charge (1)                                       -          8,680          1,244              -              - 
                                                             -----------    ------------   -----------    -----------    ----------
       Gross profit                                             118,596        113,911        122,589        145,389        108,519
       Selling, general and administrative expenses            (113,061)      (113,037)      (110,432)      (106,258)       (87,473)
       Restructuring charge (1)                                       -         (5,320)             -              -              -
       Gain from storm damage (2)                                     -          1,140          4,807              -              -
       Royalty income                                             2,076          2,630          3,049          2,655          2,512
                                                             -----------    ------------   -----------    -----------    ----------
       Operating income (loss)                                    7,611           (676)        20,013         41,786         23,558
       Other income, net                                          1,954          1,563            786          1,510          1,238
       Interest expense                                          (3,525)        (4,293)        (4,995)        (1,273)        (1,506)
                                                             -----------    ------------   -----------    -----------    ----------
       Income (loss) from operations before
          provision (benefit) for income taxes                    6,040         (3,406)        15,804         42,023         23,290
       Provision (benefit) for income taxes                       2,297           (986)         5,995         16,342          8,278
                                                             -----------    ------------   -----------    -----------    ----------
       Net income (loss)                                     $    3,743     $   (2,420)    $    9,809     $   25,681     $   15,012
                                                             -----------    ------------   -----------    -----------    ----------
                                                             -----------    ------------   -----------    -----------    ----------

       Net income (loss) per common share                    $     0.44     $    (0.28)    $     1.14     $     2.95     $     1.88
       Cash dividends declared per common share              $     0.20     $     0.20     $     0.20     $     0.20     $     0.10

       Weighted average number of common shares                   8,555          8,552          8,623          8,700          7,956


       BALANCE SHEET DATA (AT PERIOD END):
       Working capital                                       $  126,554     $  136,172     $  178,849     $  130,644     $  111,679
       Total assets                                             262,053        278,334        315,352        257,298        206,253
       Long-term debt                                            31,800         42,112         78,585         15,032          5,455
       Stockholders' equity                                     164,514        162,482        166,406        158,002        133,399

</TABLE>

       (1) The Company decided to restructure its worldwide manufacturing
           capacity, which resulted in $14.0 million in nonrecurring charges in
           the 1996 fiscal year.  During fiscal year 1995, the Company elected
           to close certain operating plants, which resulted in a $1.2 million
           nonrecurring charge.
       
       (2) During fiscal year 1995, the Company recognized a gain from the
           recording of an insurance claim, net of direct costs, where the
           insurance claim arose out of damage to the Company's main
           distribution center caused by a severe thunderstorm on May 5, 1995.
           During fiscal 1996, the Company recognized an additional $1.1 million
           gain from storm damage as a result of collections of insurance
           proceeds in excess of the September 30, 1995 recorded receivable.

                                                     10

<PAGE>

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

The following discussion and analysis of the consolidated results of 
operations and financial condition of Haggar Corp. should be read in 
conjunction with the accompanying consolidated financial statements and 
related notes contained in "Item 8, Financial Statements and Supplementary 
Data" to provide additional information concerning the Company's financial 
activities and condition.

RESULTS OF OPERATIONS.

The following table sets forth certain financial data expressed as a 
percentage of net sales for each of the fiscal years ended September 30, 
1997, 1996 and 1995.

                                                     Year Ended September 30,
                                                 1997         1996         1995
                                               -------      -------      -------
      Net sales                                 100.0%       100.0%       100.0%
      Cost of goods sold                        (70.8)       (72.0)       (72.4)
      Restructuring charge                          -         (2.0)        (0.3)
                                               -------      -------      -------
      Gross profit                               29.2         26.0         27.3
      Selling, general and
          administrative expenses               (27.8)       (25.8)       (24.6)
      Restructuring charge                          -         (1.2)           -
      Gain from storm damage                        -          0.2          1.1
      Royalty income                              0.5          0.6          0.7
                                               -------      -------      -------
      Operating income (loss)                     1.9         (0.2)         4.5
      Other income, net                           0.5          0.4          0.1
      Interest expense                           (0.9)        (1.0)        (1.1)
                                               -------      -------      -------
      Income (loss) from operations
          before provision (benefit)
          for income taxes                        1.5         (0.8)         3.5
      Provision (benefit) for taxes               0.6         (0.2)         1.3
                                               -------      -------      -------
      Net income (loss)                           0.9%        (0.6)%        2.2%
                                               -------      -------      -------

FISCAL 1997 COMPARED TO FISCAL 1996.

Net sales decreased 7.3% to $406.0 million in fiscal 1997 compared to net 
sales of $437.9 million in fiscal 1996.  The decrease in net sales during 
fiscal 1997 reflects a 9.9% decrease in unit sales offset by a 2.4% increase 
in average sales price.  Net sales for 1997 decreased from the 1996 level 
mainly due to two major product conversions for two of the Company's more 
significant customers.  Net sales were also less than expected in 1997 mainly 
related to shipping difficulties as a result of the implementation of a new 
order fulfillment system.  The order fulfillment system is currently 
operating substantially as intended.

Gross profit as a percent of net sales increased to 29.2% in 1997 compared to 
26.0% in 1996.  The increase in gross profit as a percent of net sales was 
due in part to a reduction in manufacturing costs as a result of the 
consolidation of manufacturing operations completed in 1997.

Selling, general and administrative expenses as a percent of net sales 
increased to 27.8% in fiscal 1997 from 25.8% in fiscal 1996.  Selling, 
general and administrative expenses remained constant at $113.0 million for 
1997 and 1996.  The consistency in selling, general and administrative 
expenses during fiscal 1997 was primarily the cumulative result of (i) an 
increase in depreciation expense of approximately $2.6 million related to the 
Customer Service Center ("CSC"), (ii) a decrease of approximately $7.2 
million in distribution costs in 1997 resulting from reduced labor required 
to operate the CSC in 1997, (iii) severance costs of $2.4 million 
resulting from a reorganization of the Company's sales force and a reduction 
in corporate personnel, (iv) a 

                                         11
  
<PAGE>

decrease of $2.3 million in commissions due to decreased sales, and (v) an 
increase of approximately $4.4 million in expenses related to the opening and 
operations of 13 new retail stores during fiscal 1997 and a full year of 
operations for stores opened in fiscal 1996.

The Company is currently negotiating leases for 11 new retail outlet stores 
which are planned to be opened in fiscal 1998.  The Company intends to 
continue to evaluate the growth potential for retail outlet malls and may 
open additional retail stores as opportunities arise.

Other income, net, increased in fiscal 1997 to $2.0 million from $1.6 million 
in fiscal 1996, primarily as the result of an approximate $1.0 million 
recovery of historical losses from the dissolution of the Company's joint 
venture in the United Kingdom with Coats Viyella, Plc.

FISCAL 1996 COMPARED TO FISCAL 1995.

Net sales decreased 2.4% to $437.9 million in fiscal 1996 compared to net 
sales of $448.5 million in fiscal 1995.  The decrease in net sales during 
fiscal 1996 reflects a 1.4% increase in unit sales offset by a 3.7% decrease 
in average sales price.  During the first half of fiscal 1996, net sales were 
adversely affected by decreased holiday sales at retail and severe weather 
conditions in the Eastern U.S. which slowed efforts to clear post-holiday 
inventories.  By comparison, net sales for the first six months of fiscal 
1995 were the highest in the Company's history.  During the second half of 
fiscal 1996 net sales exceeded the net sales during the same period in 1995.  
However, net sales for the second half of fiscal 1995 were unusually low due 
to the May 5, 1995 storm damage.  Sales volume in the second half of fiscal 
1996 was below expectations because of shipping difficulties incurred in the 
Company's new CSC.  Despite acceptable initial test results, under 
operational conditions the automated shipping systems within the CSC were 
unable to accommodate the level of shipment volume needed.  The Company has 
been able to overcome the shipping difficulties experienced during the 
transition into the new CSC during the fourth quarter of fiscal 1996.

Gross profit as a percent of net sales decreased to 26.0% in 1996 compared to 
27.3% in 1995. The decrease in gross profit as a percent of net sales was 
primarily due to the manufacturing restructuring charge of $8.7 million which 
was recorded in the fourth quarter of fiscal 1996.  Absent the manufacturing 
restructuring charges taken in both years, gross profit in 1996 would have 
improved to 28%, as compared to 27.6% in fiscal 1995.  However, gross profit 
in both years was adversely impacted by inventory and sales price markdowns 
resulting from the Company's efforts to reduce excess inventories.

The manufacturing restructuring charge was the result of the Company's 
decision to pursue a strategic move intended to improve gross margins and 
profitability in 1997 and beyond by consolidating its three Texas sewing 
operations into one facility.  The restructuring charge was recorded in the 
fourth quarter of fiscal 1996 and included an $8.7 million charge to cost of 
sales related principally to severance costs for manufacturing employees and 
a $5.3 million charge to selling, general and administrative expenses related 
principally to costs to resolve various legal issues in connection with the 
restructuring and prior plant closings as well as severance for 
non-manufacturing employees.

                                         12

<PAGE>

Selling, general and administrative expenses as a percent of net sales 
increased to 25.8% in fiscal 1996 from 24.6% in fiscal 1995. Actual selling, 
general and administrative expenses increased $2.6 million to $113.0 million 
in 1996 compared to $110.4 million in 1995.  The primary reasons for the 
increase in selling, general and administrative expenses during fiscal 1996 
were (i) an increase in depreciation expense of approximately $2.0 million 
related to the new CSC, (ii) an approximate $8.2 million increase in 
distribution costs in 1996 resulting from the use of additional labor in 
temporary distribution facilities pending completion of the CSC, and (iii) an 
approximate $5.0 million increase in expenses related to the opening and 
operations of 20 new retail stores during fiscal 1996.  The Company partially 
offset these increases by decreasing advertising costs by approximately $6.5 
million and decreasing other costs attributable to sales.

The gain from storm damage recorded in fiscal 1995 was the result of the 
Company recording a $24.0 million charge in the third quarter of fiscal 1995 
to cover the costs of damage caused by the May 5, 1995, storm.  These costs 
included the write-down of damaged inventory to its salvage value, damages to 
the Company's building and equipment and disaster recovery charges. In the 
fourth quarter of fiscal 1995, the Company recorded an additional $10.2 
million of expense related to the write-off of salvage value of inventory and 
additional distribution costs. The Company settled its insurance claim 
related to inventory damaged during the storm for $35.0 million.  The Company 
recorded $4.0 million for additional claims related to real and personal 
property damage suffered on May 5, 1995.  The net result recorded in fiscal 
1995 was a $4.8 million gain from storm damage.  During fiscal 1996, the 
Company received insurance proceeds in the final settlement of substantially 
all claims with the Company's insurance carrier related to the Company's 
damaged distribution center and warehouse resulting in an additional $1.1 
million gain from storm damage.

Other income, net, increased in fiscal 1996 to $1.6 million from $0.8 million 
in fiscal 1995, primarily as the result of an approximate $1.6 million gain 
from the sale of two buildings during 1996.  The Company sold these buildings 
to dispose of surplus facilities caused by the consolidation of the shipping 
operations into the CSC.

INCOME TAXES.

The Company's income tax provision, as a percent of income from operations 
before income tax, was 38.0% in fiscal 1997.  Comparatively, the Company's 
income tax provision/benefit, as a percent of income/loss from operations 
before income tax, was 28.9% and 37.9% in fiscal 1996 and 1995, respectively. 
For fiscal 1997, 1996 and 1995 the effective income tax rates differed from 
the statutory rates because of state income taxes, tax credits utilized and 
certain permanent tax differences.

SEASONALITY.

Historically, the Company's business has been seasonal, with slightly higher 
sales and income in the second and fourth quarters, just prior to and during 
the two peak retail selling seasons for spring and fall merchandise, which 
reflects the buying patterns of the Company's customers.  The quarterly data 
for fiscal 1995 was adversely affected in the third and fourth quarters by 
the May 5, 1995, storm damage.  The following table presents certain data for 

                                   13

<PAGE>

each of the Company's last twelve fiscal quarters. The quarterly data is 
unaudited, but gives effect to all adjustments (consisting of normal 
recurring adjustments) necessary, in the opinion of management of the 
Company, to present fairly the data for such periods (in thousands, except 
per share data).

<TABLE>
<CAPTION>

                                                                  First         Second            Third        Fourth
                                                                 Quarter        Quarter          Quarter       Quarter
                                                                 -------        -------          -------       -------
                                                                                  (1)              (2)         (2),(3)
 <S>                                                    <C>     <C>             <C>              <C>           <C>
 Net sales                                              1997    $104,157        $98,608          $87,996       $115,269
                                                        1996      98,418        110,840          103,769        124,915
                                                        1995     121,033        121,118           85,182        121,199

 Gross profit                                           1997     $30,738        $28,424          $24,504        $34,930
                                                        1996      27,084         30,100           28,933         27,794
                                                        1995      35,353         31,030           21,931         34,275

 Selling, general and administrative expenses           1997     $27,797        $28,485          $27,550        $29,229
                                                        1996      26,629         26,999           26,667         32,742
                                                        1995      27,047         27,001           28,794         27,590


 Income (loss) before income taxes                      1997      $2,295           $746          $(3,213)        $6,212
                                                        1996       1,614          2,553            1,762         (9,335)
                                                        1995       8,607          3,620          (31,116)        34,693

 Net income (loss)                                      1997      $1,383           $440          $(1,926)        $3,846
                                                        1996       1,004          1,584            1,082         (6,090)
                                                        1995       5,336          2,167          (19,737)        22,043

 Net income (loss) per common share and                 1997       $0.16          $0.06           $(0.23)         $0.45
  common share equivalent                               1996        0.12           0.19             0.13          (0.71)
                                                        1995        0.62           0.25            (2.30)          2.57
       
</TABLE>

 (1) In the second quarter of fiscal 1997, the Company had decreased
     sales due to product conversions and to shipment delays commencing in
     the month of March as a result of problems encountered during the
     implementation of an upgraded customer service, order processing and
     billing software system.  The Company has addressed the
     implementation issues and improved the system's functionality.
     Internal changes to the system continue to be made to improve its
     operational efficiencies and ease of use.
       
 (2) In the third quarter of fiscal 1995 the Company recorded a $24.0
     million loss related to the storm damage incurred at the distribution
     facility on May 5, 1995.  During the fourth quarter of fiscal 1995
     the Company recorded a gain of $28.8 million due to insurance
     proceeds received and expected to be received as a result of the
     storm damage.  These amounts are included in Gain from Storm Damage
     in the 1995 statement of operations.
       
 (3) During the fourth quarter of fiscal 1996 the Company recorded
     restructuring charges of $14.0 million related to the decision to
     restructure its manufacturing capacity through consolidation of three
     Texas sewing facilities into one operation.  The restructuring
     charges were $8.7 million included as a component of cost of sales
     and $5.3 million included as operating expenses.

                                          14

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES.

The Company's trade accounts receivable potentially expose the Company to 
concentrations of credit risks as all of its customers are in the retail 
apparel industry. The Company performs ongoing credit evaluations of its 
customers' financial condition and establishes an allowance for doubtful 
accounts based upon factors related to the credit risk of specific customers, 
historical trends and other information. The Company's days sales outstanding 
improved to 43 days on September 30, 1997, down from 45 as of September 30, 
1996.

Inventories at the end of fiscal 1997 decreased to $105.2 million from $116.4 
million at the end of fiscal 1996.  The reduction in inventory levels during 
fiscal 1997 reflects the Company's ongoing efforts to manage inventory.

The Company's external financing needs are met through an unsecured revolving 
credit facility (the "Facility") with certain banks. The Facility provides 
the Company with a $100.0 million line of credit.  The amount available under 
the Facility is limited to the lesser of $100.0 million minus any letter of 
credit exposure or the borrowing base as defined in the Facility. During the 
current fiscal year the Company amended the Facility to extend the expiration 
date of the Facility to December 31, 1999.  As of September 30, 1997, the 
Company had $3.0 million outstanding under the Facility and had additional 
borrowing capacity of $84.0 million.

The Company's Haggar UK subsidiary maintains a $3.2 million line of credit 
with a bank in the United Kingdom to fund its operating activities. At 
September 30, 1997, approximately $2.4 million was outstanding under this 
line of credit. The line of credit is collateralized by an approximate $3.2 
million letter of credit from the Company and is payable upon demand. 
Interest under the line is payable at 1% above the bank's base rate.

In 1997, the Company reached an agreement with its joint venturer, Coats 
Viyella Plc, to dissolve and wind-up the joint venture of the two firms in 
the United Kingdom.  The Company intends to continue to market 
Haggar-Registered Trademark- apparel in the United Kingdom, including 
Northern Ireland and the Republic of Ireland.

In 1995, the Company completed the sale and issuance of $25.0 million in 
senior notes. The proceeds from the notes were used to partially fund the 
construction of the Company's new CSC. Significant terms of the senior notes 
include a maturity date of ten years from the date of issuance, interest 
payable semi-annually and annual principal payments beginning in the fourth 
year. The interest rate on the senior notes is fixed at 8.49%. The terms and 
conditions of the note purchase agreement governing the senior notes include 
restriction on the sale of assets, limitations on additional indebtedness and 
the maintenance of certain net worth requirements. The balance of the 
approximately $38.0 million cost of the CSC was financed with internally 
generated funds and bank borrowings.

The Company sold all of its investments in preferred stock and equity 
securities in fiscal 1996 for approximately $5.0 million.  The proceeds from 
the sale were used to reduce borrowings under the Company's line of credit. 
The sale of these securities resulted in realized losses of $0.5 million.

The Company provided cash from operating activities for the fiscal year ended 
September 30, 1997 of $23.4 million, as a result of the reduction in 
inventory of $11.1 million, net income, and depreciation and amortization 
offset by a decrease in accrued liabilities of $12.0 million. Additionally, 
the Company used cash in investing activities of $12.3 million during fiscal 
1997, the result of purchases of property, plant, and equipment of $15.0 
million primarily in connection with the opening of retail stores during the 
fiscal year.  The Company had 41 retail stores open at the end of the 1997 
fiscal year compared to 28 at the end of fiscal 1996. Furthermore, cash flows 
used in financing activities of $11.9 million for the 1997 fiscal year were 
primarily the result of a net reduction in long-term debt of $10.5 million.  
Comparatively, the Company provided cash from operating activities of $45.6 
million for the fiscal year ended September 30, 1996, primarily as a result 
of the reduction in inventory of $22.5 million, as well as the collection of 
insurance proceeds of $23.9 million related to the damage from the May 5, 
1995 storm.  Additionally, the Company used cash in investing activities of 
$7.1 million during fiscal 1996, the result of purchases of property, plant, 
and equipment of $16.1 million primarily in connection with the opening of 
retail stores during the fiscal year.  The Company had 28 retail stores open 
at the end of the 1996 fiscal year compared to eight at the end of fiscal 
1995.  Furthermore, 

                                          15
<PAGE>

cash flows used in financing activities of $37.8 million for the 1996 fiscal 
year were primarily the result of a net reduction in long-term debt of $36.4 
million.

The Company believes that the cash flow generated from operations and the 
funds available under the foregoing credit facilities will be adequate to 
meet its working capital and related financing needs for the foreseeable 
future.

Inflation did not materially impact the Company in 1997, 1996 or 1995.

NEW ACCOUNTING STANDARD.

The Company will adopt the provisions of SFAS No. 128, "Earnings per share," 
in the first quarter of fiscal 1998.  SFAS No. 128 replaces the primary 
earnings per share calculation with a basic earnings per share calculation 
and modifies the calculation of diluted earnings per share.  Had the Company 
adopted the provisions of SFAS No. 128 during fiscal 1997, the Company would 
have reported both basic and diluted earnings per share of $0.44 per share, 
the same as the actual net income per share reported of $0.44 per share.

YEAR 2000 CONSIDERATIONS

The Company is taking actions to determine that its computer systems are 
capable of processing periods for the year 2000 and beyond.  The Company has 
assessed and continues to assess the impact of the year 2000 on its 
operations, including the development of cost estimates for and the extent of 
programming changes required to address the issue, and to date has determined 
the costs related thereto would not have a material impact on its ongoing 
results of operations.  Also, the Company is assessing the impact of their 
customers' and vendors' compliance to year 2000 and what the impact will be 
on the Company's ongoing results of operation.

FORWARD LOOKING STATEMENTS.

This report contains certain forward-looking statements.  In addition, from 
time to time the Company may issue press releases and other written 
communications, and representatives of the Company may make oral statements, 
which contain forward-looking information.  Except for historical 
information, matters discussed in such oral and written communications are 
forward-looking statements that involve risks and uncertainties which could 
cause actual results to differ materially from those in such forward-looking 
statements.

Risks and uncertainties inherent to the Company's line of business include 
such factors as natural disasters, general economic conditions, the 
performance of the retail sector in general and the apparel industry in 
particular, the competitive environment, consumer acceptance of new products, 
and the success of advertising, marketing and promotional campaigns.  
Additional risks and uncertainties which could cause the Company's actual 
results to differ from those contained in any forward-looking statements are 
discussed elsewhere herein.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Report of Independent Public Accountants, Financial Statements and Notes 
to Financial Statements follow.

                                          16

<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Haggar Corp.:

We have audited the accompanying consolidated balance sheets of Haggar Corp. 
(a Nevada corporation) and subsidiaries as of September 30, 1997 and 1996, 
and the related consolidated statements of operations, stockholders' equity 
and cash flows for each of the three years in the period ended September 30, 
1997. These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Haggar Corp. and 
subsidiaries as of September 30, 1997 and 1996, and the results of their 
operations and their cash flows for each of the three years in the period 
ended September 30, 1997, in conformity with generally accepted accounting 
principles.

                                                        Arthur Andersen LLP

Dallas, Texas
October 31, 1997
                                       
                                       17

<PAGE>

                              HAGGAR CORP. AND SUBSIDIARIES

                          CONSOLIDATED STATEMENTS OF OPERATIONS
                         (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                       

<TABLE>
<CAPTION>
                                                                  Year Ended September 30,
                                                        ------------------------------------------
                                                            1997           1996           1995
                                                        -----------    ----------     ------------
<S>                                                      <C>           <C>            <C>

Net sales                                                $406,030       $437,942       $448,532

Cost of goods sold                                        287,434        315,351        324,699
Restructuring charge                                            -          8,680          1,244
                                                        -----------    ----------     ------------
 Gross profit                                             118,596        113,911        122,589

Selling, general and administrative expenses             (113,061)      (113,037)      (110,432)
Restructuring charge                                            -         (5,320)             -
Gain from storm damage                                          -          1,140          4,807
Royalty income                                              2,076          2,630          3,049
                                                        -----------    ----------     ------------
Operating income (loss)                                     7,611           (676)        20,013

Other income, net                                           1,954          1,563            786

Interest expense                                           (3,525)        (4,293)        (4,995)
                                                        -----------    ----------     ------------
Income (loss) from operations before provision
 (benefit) for income taxes                                 6,040         (3,406)        15,804

Provision (benefit) for income taxes                        2,297           (986)         5,995
                                                        -----------    ----------     ------------
Net income (loss)                                        $  3,743       $ (2,420)      $  9,809
                                                        -----------    ----------     ------------
                                                        -----------    ----------     ------------
Net income (loss) per common share and common
 share equivalent                                        $   0.44       $  (0.28)      $   1.14
                                                        -----------    ----------     ------------
                                                        -----------    ----------     ------------
Weighted average number of common shares
 and common share equivalents outstanding                   8,555          8,552          8,623
                                                        -----------    ----------     ------------
                                                        -----------    ----------     ------------

</TABLE>


      The accompanying notes are an integral part of these consolidated 
                         financial statements.

                                   18

<PAGE>

                         HAGGAR CORP. AND SUBSIDIARIES
                                       
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)

                                                            September 30,
                                                     --------------------------
                                                          1997          1996
                                                      -----------   -----------
ASSETS
Current assets:
 Cash and cash equivalents                             $    2,176    $    2,944
 Accounts receivable, net                                  70,969        74,556
 Inventories                                              105,242       116,356
 Deferred tax benefit                                      10,073        12,410
 Other current assets                                       3,833         3,646
                                                      -----------   -----------
  Total current assets                                    192,293       209,912

Property, plant, and equipment, net                        68,697        65,760

Other assets                                                1,063         2,662
                                                      -----------   -----------
Total assets                                           $  262,053    $  278,334
                                                      -----------   -----------
                                                      -----------   -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                      $   28,423    $   23,596
 Accrued liabilities                                       26,195        38,254
 Accrued wages and other
  employee compensation                                     3,481         3,447
 Accrued workers' compensation                              4,948         5,895
 Short-term borrowings                                      2,362         2,067
 Current portion of long-term debt                            330           481
                                                      -----------   -----------
  Total current liabilities                                65,739        73,740

Long-term debt                                             31,800        42,112
                                                      -----------   -----------
  Total liabilities                                        97,539       115,852

Stockholders' equity:
Common stock - par value $0.10 per share; 25,000,000
 shares authorized and 8,560,636 shares issued
 in 1997 and 1996                                             856           856
Additional paid-in capital                                 41,641        41,641
Retained earnings                                         122,018       119,986
                                                      -----------   -----------
                                                          164,515       162,483
Less - Treasury stock, 9,254 shares at par value               (1)           (1)
                                                      -----------   -----------
  Total stockholders' equity                              164,514       162,482
                                                      -----------   -----------
Total liabilities and stockholders' equity             $  262,053    $  278,334
                                                      -----------   -----------
                                                      -----------   -----------

            The accompanying notes are an integral part of these consolidated 
                                 financial statements.

                                          19

<PAGE>

                              HAGGAR CORP. AND SUBSIDIARIES
                                       
                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                       
<TABLE>
<CAPTION>

                                        Common Stock                            Unrealized
                                     -----------------        Additional         Loss on                                Total
                                      $0.10 Par Value          Paid-In          Marketable   Retained     Treasury   Stockholders'
                                   Shares             $        Capital          Securities   Earnings      Stock        Equity
                                  -----------------------     --------          ----------   ---------     -----        ------
<S>                              <C>                <C>       <C>               <C>          <C>          <C>        <C>

BALANCE,
 September 30, 1994              8,546,105           $855      $41,371           $(239)      $116,016      $  (1)      $158,002

Common stock
 issuance                           14,531              1          270               -              -          -            271
Common stock
 dividends declared
 ($0.20 per share)                       -              -            -               -         (1,709)         -         (1,709)
Unrealized loss
 on marketable
 securities                              -              -            -              33              -          -             33

Net income                               -              -            -               -          9,809          -          9,809
                                -------------------------------------------------------------------------------------------------
BALANCE,
 September 30, 1995              8,560,636            856       41,641            (206)       124,116         (1)       166,406

Common stock
 dividends declared
 ($0.20 per share)                       -              -            -               -         (1,710)         -         (1,710)
Recovery of unrealized
 loss on marketable
 securities                              -              -            -             206              -          -            206

Net loss                                 -              -            -               -         (2,420)         -         (2,420)
                                -------------------------------------------------------------------------------------------------
BALANCE,
 September 30, 1996              8,560,636            856       41,641               -        119,986         (1)       162,482

Common stock
 dividends declared
 ($0.20 per share)                       -              -            -               -         (1,711)         -         (1,711)

Net income                               -              -            -               -          3,743          -          3,743
                                -------------------------------------------------------------------------------------------------
BALANCE,
 September 30, 1997              8,560,636           $856      $41,641            $  -       $122,018      $  (1)      $164,514
                                -------------------------------------------------------------------------------------------------

</TABLE>

        The accompanying notes are an integral part of these consolidated 
                          financial statements.
                                                      
                                  20

<PAGE>

                                            HAGGAR CORP. AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (IN THOUSANDS)
                                                                 

<TABLE>
<CAPTION>

                                                                            Year Ended September 30,
                                                                  ------------------------------------------
                                                                      1997          1996            1995
                                                                  ----------    -----------     ------------
<S>                                                                <C>          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                  $  3,743     $   (2,420)     $   9,809
Adjustments to reconcile net income (loss) to net cash
 provided by (used in) operating activities:
 Depreciation and amortization                                       11,447          6,839          3,268
 (Gain) loss on disposal of property, plant, and equipment             (480)        (1,608)           144
 Net (gain) loss on sale of marketable securities                         -            542           (117)
 Changes in assets and liabilities -
  Accounts receivable, net                                            3,587         (7,589)        13,117
  Inventories                                                        11,114         22,551        (21,343)
  Insurance receivable                                                    -         23,890        (23,990)
  Current deferred tax benefit                                        2,337            288         (1,872)
  Other current assets                                                 (187)           148            (23)
  Accounts payable                                                    4,827         (2,852)       (12,403)
  Accrued liabilities                                               (12,059)         6,999          1,448
  Accrued wages and other employee compensation                          34            104         (3,259)
  Accrued workers' compensation expense                                (947)        (1,338)          (214)
                                                                  ----------    -----------     ------------
   Net cash provided by (used in) operating activities               23,416         45,554        (35,435)
                                                                  ----------    -----------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant, and equipment, net                    (14,989)       (16,070)       (30,613)
Proceeds from sale of property, plant, and equipment, net             1,085          1,695              -
Proceeds from the sale of marketable securities                           -          5,018          3,156
(Increase) decrease in other assets                                   1,599          2,234           (130)
                                                                  ----------    -----------     ------------
   Net cash used in investing activities                            (12,305)        (7,123)       (27,587)
                                                                  ----------    -----------     ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from short-term borrowings                                 295            432            501
Proceeds from issuance of long-term debt                             61,000        422,000        517,000
Payments on long-term debt                                          (71,463)      (458,439)      (453,423)
Payments of cash dividends                                           (1,711)        (1,710)        (1,709)
Net proceeds from the issuance of common stock                            -              -            271
                                                                  ----------    -----------     ------------
   Net cash provided by (used in) financing activities              (11,879)       (37,717)        62,640
                                                                  ----------    -----------     ------------

Increase (decrease) in cash and cash equivalents                       (768)           714           (382)
Cash and cash equivalents, beginning of period                        2,944          2,230          2,612
                                                                  ----------    -----------     ------------
Cash and cash equivalents, end of period                           $  2,176     $    2,944      $   2,230
                                                                  ----------    -----------     ------------
                                                                  ----------    -----------     ------------

Supplemental disclosure of cash flow information
Cash paid (received) for:
 Interest, net of amounts capitalized                              $  3,806     $    3,350      $   3,275
 Income taxes, net                                                 $   (589)    $   (1,359)     $   9,236

</TABLE>

         The accompanying notes are an integral part of these consolidated
                             financial statements.
                                       
                                     21

<PAGE>

                                HAGGAR CORP. AND SUBSIDIARIES

                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                SEPTEMBER 30, 1997, 1996 AND 1995

1.  OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Haggar Corp. and subsidiaries (the "Company") designs, manufactures, imports, 
and markets men's apparel products including pants, shorts, suits, 
sportcoats, and shirts. The Company's products are sold to retail stores 
throughout the United States including major department stores, specialty 
stores and mass market retailers. The Company offers its premium apparel 
products under the Haggar-Registered Trademark- brand name, and also offers a 
more moderately priced line of products under its Reed St. James-Registered 
Trademark- brand name through its mass market retailer division, The Horizon 
Group. In addition, the Company offers retailers quality products bearing the 
retailer's own label. The Company's Haggar Direct, Inc. subsidiary was formed 
in 1995 for the purpose of developing and operating retail stores located in 
retail outlet malls throughout the United States. The Company's foreign 
operations are conducted through Haggar Apparel Limited, which markets the 
Company's branded products in Europe. Additionally, the Company derives 
royalty income from the use of its Haggar-Registered Trademark- and Reed St. 
James-Registered Trademark-trademarks by manufacturers of various products 
that the Company does not produce. The Company is headquartered in Dallas, 
Texas, with manufacturing facilities in Texas, Mexico and the Dominican 
Republic.

The consolidated financial statements include the accounts of Haggar Corp., 
Haggar Clothing Co. ("Clothing Co."), which is the main operating subsidiary, 
Haggar Direct, Inc., Haggar Apparel Limited, and all other subsidiaries of 
Clothing Co. All significant intercompany transactions and balances have been 
eliminated in consolidation.

The accompanying consolidated financial statements reflect the application of 
certain accounting policies as described below and in the remaining notes.

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company considers all 
highly liquid investments with original maturities of three months or less to 
be cash equivalents.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable are net of allowances for doubtful accounts of $931,000 
and $900,000 at September 30, 1997 and 1996, respectively.

CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially expose the Company to concentrations 
of credit risk, as defined by Statement of Financial Accounting Standards 
(SFAS) No. 105, "Disclosure of Information about Financial Instruments with 
Off-Balance Sheet Risk and Financial Instruments with Concentrations of 
Credit Risk," consist primarily of trade accounts receivable. The Company's 
customers are not concentrated in any specific geographic region but are 
concentrated in the apparel industry. One customer accounted for 27.3%, 26.3% 
and 28.7% of the Company's net sales during the year ended September 30, 
1997, 1996 and 1995, respectively. No other customer accounted for more than 
10% of consolidated revenues. The loss of the business of one or more of the 
Company's largest customers could have a material adverse effect on the 
Company's results of operations. The Company performs ongoing credit 
evaluations of its customers' financial condition. The Company establishes an 
allowance for doubtful accounts based upon factors surrounding the credit 
risk of specific customers, historical trends, and other information.

                                    22

<PAGE>


INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or market, 
and consisted of the following at September 30, 1997 and 1996 (in thousands):

                                                           1997           1996
                                                       ----------     ----------
 Piece goods                                           $   17,455     $   23,335
 Trimming and supplies                                      3,841          5,991
 Work-in-process                                           16,162         13,248
 Finished garments                                         67,784         73,782
                                                       ----------     ----------
 Total inventories                                     $  105,242     $  116,356
                                                       ----------     ----------
                                                       ----------     ----------

Work-in-process and finished garments inventories consisted of materials, 
labor and manufacturing overhead.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment, stated at cost, consisted of the following at 
September 30, 1997 and 1996 (in thousands):

                                                            1997         1996
                                                        ----------    ---------
 Land                                                   $   3,428     $   3,428
 Buildings                                                 29,880        29,878
 Furniture, fixtures and equipment                         76,931        80,786
 Leasehold improvements                                    13,143        11,856
 Construction in progress                                   3,526           369
                                                        ----------    ---------
     Total                                                126,908       126,317
 Less: Accumulated depreciation
     and amortization                                     (58,211)      (60,557)
                                                        ----------    ---------
 Net property, plant, and equipment                     $  68,697     $  65,760
                                                        ----------    ---------
                                                        ----------     ---------

DEPRECIATION AND AMORTIZATION

The Company provides for depreciation and amortization using accelerated and 
straight-line methods by charges to operations in amounts which allocate the 
cost of the assets over their estimated useful lives, as follows:

                                                       Estimated
 Asset Classification                                 Useful Life
 --------------------                                 -----------
 Buildings                                               15-40
 Furniture, fixtures, and equipment                       3-7
 Leasehold improvements                              Life of Lease

                                         23

<PAGE>

FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosure about Fair Value of Financial Instruments," 
requires the disclosure of the fair market value of off- and on-balance sheet 
financial instruments. The carrying value of all financial instruments, 
including long-term debt and cash and temporary cash investments, 
approximates their fair value at year-end.

Realized gains and losses on investments in preferred stocks are determined 
on a specific identification basis. During the second quarter of fiscal 1996, 
the Company sold all of its investments in preferred stock and equity 
securities. These investments had been classified as available-for-sale 
securities and were reported at their fair values with unrealized gains and 
losses excluded from earnings and reported as a separate component of 
stockholders' equity, net of tax.  The Company had no realized gains or 
losses in fiscal 1997 and recognized realized losses of $542,000 in 1996.  
During fiscal 1995 realized losses of $6,000 were offset by realized gains of 
$123,000. The net effect of these gains and losses is reflected in Other 
income, net, in the accompanying Consolidated Statements of Operations.  
There were no gross unrealized losses as of September 30, 1997 and 1996.

MINORITY INTEREST

In 1993, the Company established a subsidiary, Haggar UK, for the purpose of 
expanding its operations in the United Kingdom. The Company held a 51% 
interest in the subsidiary and its partner owned the remaining 49% interest.  
The assets and liabilities of Haggar UK have been reflected in the 
consolidated financial statements as of September 30, 1996. As cumulative net 
losses from the initial operations of the subsidiary have exceeded 
contributed capital, there has been no minority interest reflected in the 
consolidated balance sheets as of September 30, 1996.

In 1997, the Company dissolved the joint venture with its partner, Coats 
Viyella, Plc., and the Company received $1,050,000 from Coats Viyella, Plc. 
for payment of historical losses.  The payment is recorded in Other income, 
net.

In conjunction with the dissolution of the joint venture, the Company 
obtained the remaining 49% interest in the subsidiary's assets and 
liabilities. Consequently, the subsidiary's financial position and results of 
operations have been consolidated and included in the Company's financial 
statements for fiscal 1997.  Also, the remaining entity changed it's name to 
Haggar Apparel, Limited.

The Haggar UK subsidiary established lines of credit with banks to fund 
operating activities. Available borrowing capacity at September 30, 1997 was 
approximately $800,000 with approximately $2,400,000 and $2,067,000 outstanding
as of September 30, 1997 and 1996, respectively. Interest is payable at 1% 
above the bank's base rate, as defined (7.25% at September 30, 1997). The lines
of credit are collateralized by an approximate $3.2 million letter of credit 
from the Company and is payable upon demand.

REVENUE RECOGNITION

Revenue is recognized upon product shipment to customers.

ADVERTISING

Production costs of commercials and programming are charged to operations in 
the year first aired.  The costs of other advertising, promotion and 
marketing programs are charged to operations in the year incurred.  For 
fiscal years 1997, 1996, and 1995 total advertising expense was $22.9 
million, $21.5 million and $28.0 million, respectively.

                                      24

<PAGE>

OTHER INCOME

Other income consisted of the following for the years ended September 30, 
1997, 1996 and 1995 (in thousands):

                                              1997      1996     1995
                                            ------    ------    -----
 Gain (loss) on sale of assets, net         $  480    $1,608    $(144)
 Interest income                               218        61       81
 Dissolution of Haggar UK joint venture      1,050         -        -
 Investment income (loss), net                   -     (436)      657
 Other                                         206       330      192
                                            ------    ------    -----
  Total Other income, net                   $1,954    $1,563    $ 786
                                            ------    ------    -----
                                            ------    ------    -----

NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT

Net income per common share and common share equivalent is calculated by 
dividing net income by the weighted average shares of common stock and common 
stock equivalents outstanding. Common stock equivalents represent the effect, 
if any, of the assumed purchase of common shares, using the treasury stock 
method, pursuant to common stock options issued under a long-term incentive 
plan. Common stock equivalents have been determined in 1997, 1996 and 1995 
using a common stock market price of $14.88, $14.50 and $21.26, respectively, 
per share.

The Company will adopt the provisions of SFAS No. 128, "Earnings Per Share," 
in the first quarter of fiscal 1998.  SFAS No. 128 replaces the primary 
earnings per share calculation with a basic earnings per share calculation 
and modifies the calculation of diluted earnings per share.  Had the Company 
adopted the provisions of SFAS No. 128 during fiscal 1997, the Company would 
have reported both basic and diluted earnings per share of $0.44 per share, 
the same as the actual net income per share reported of $0.44 per share.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.

2.  INCOME TAXES

The components of the provision (benefit) for income taxes are as follows for 
the years ended September 30, 1997, 1996 and 1995 (in thousands):

                                            1997           1996         1995
                                          --------      --------      --------
 Current federal income tax               $   (116)     $   (347)     $  7,473
 Deferred federal income tax                 2,366          (595)       (2,212)
 State income tax                               47           (44)          734
                                          --------      --------      --------
 Provision (benefit) for income taxes     $  2,297      $   (986)     $  5,995
                                          --------      --------      --------
                                          --------      --------      --------

                                  25

<PAGE>

Temporary differences and carryforwards which give rise to a significant 
portion of net deferred income tax assets are as follows (in thousands):

                                              1997           1996
                                            --------       --------
 Deferred income tax assets:
 Workers' compensation accrual              $  1,731       $  2,063
 Inventory cost capitalization
  and valuation                                5,460          3,741
 Allowances for
  accounts receivable                              -          1,237
 Health and life insurance accrual               947            982
 Reserve for reorganization                    2,643          4,900
 Other                                         1,107          2,396
                                            --------       --------
                                              11,888         15,319

 Less - Valuation allowance                     (250)          (250)
                                            --------       --------
                                              11,638         15,069
 Deferred income tax liability:
 Property, plant, and equipment, net          (2,202)        (1,015)
 Prepaid insurance                              (561)        (1,050)
                                            --------       --------
 Net deferred income tax asset                 8,875         13,004
 Less - Current deferred tax benefit          10,073         12,410
                                            --------       --------
 Long-term deferred tax (liability)
  benefit                                   $ (1,198)      $    594
                                            --------       --------
                                            --------       --------

The provision (benefit) for income taxes was different than the amount 
computed using the statutory federal income tax rate for the reasons set 
forth in the following table (in thousands):

                                  1997       1996        1995
                                 ------    -------      ------
 Tax computed at the
  statutory rate                 $2,053    $(1,158)      5,531
 State income taxes                  47        (44)        734
 Tax credits utilized              (186)       (96)       (491)
 Other                              383        312         221
                                 ------    -------      ------
                                 $2,297    $  (986)     $5,995
                                 ------    -------      ------
                                 ------    -------      ------

3.  INSURANCE RECEIVABLE

On May 5, 1995, a severe thunderstorm struck the Dallas - Fort Worth 
metropolitan area causing widespread damage. During the high winds and heavy 
rains caused by these thunderstorms, a portion of the roof over the Company's 
main distribution center collapsed.  The Company received a $35,000,000 
insurance settlement related to the inventory and approximately $5,100,000 
related to real and personal property damaged during the storm.

The insurance proceeds received in 1995 as a result of the storm damage were 
included in Gain from Storm Damage in the accompanying 1995 statement of 
operations. Such proceeds have been offset by approximately $34,000,000 in 
expenses related specifically to the storm damage, including approximately 
$24,000,000 of damaged inventory, $4,000,000 of additional distribution 
costs, and $6,000,000 of property and equipment damage and other disaster 
recovery costs. Collections in excess of the recorded receivable resulted in 
a $1,100,000 gain from the settlement of the real and other personal property 
claims for the year ended September 30, 1996.  As of September 30, 1997, no 
insurance receivable exists related to the storm damage.

                                 26

<PAGE>

4.  LONG-TERM DEBT

Long-term debt consisted of the following at September 30, 1997 and 1996 (in 
thousands):

                                                 1997              1996
                                              ---------         ---------
 Borrowings under revolving
  credit line                                 $   3,000         $  13,000

 Industrial Development Revenue
  Bonds with interest at a rate equal
  to that of high-quality, short-term,
  tax-exempt obligations, as defined
  (4.20% at September 30, 1997),
  payable in annual installments of
  $100 to $200, and a final payment
  of $2,000 in 2005, secured by
  certain buildings and equipment                 2,800             2,900
 Allstate notes                                  25,000            25,000
 Other                                            1,330             1,693
                                              ---------         ---------
                                                 32,130            42,593
 Less - Current portion                             330               481
                                              ---------         ---------
 Total Long-Term Debt                         $  31,800         $  42,112
                                              ---------         ---------
                                              ---------         ---------

Net assets mortgaged or subject to lien under the Industrial Development 
Revenue Bonds totaled approximately $1,200,000 at September 30, 1997.

As of September 30, 1997, the Company had a revolving credit line agreement 
(the "Agreement") with certain banks subject to certain borrowing base 
limitations. During 1997, the Agreement was amended to extend the maturity 
date to December 31, 1999. The Company had additional available borrowing 
capacity of approximately $84,000,000 under this Agreement at September 30, 
1997. The Company incurred approximately $170,000 in commitment fees related 
to the available borrowing capacity during the year ended September 30, 1997. 
The interest rates for the year ended September 30, 1997, ranged from 6.03% 
to 8.50%, and the weighted average interest rate for the year was 8.13%. The 
facility will mature December 31, 1999, with a one year renewal at the option 
of the banks and is unsecured, except that the Company is prohibited from 
pledging its accounts receivables and inventories during the term of the 
Agreement. The Agreement contains limitations on incurring additional 
indebtedness and requires the maintenance of certain financial ratios. In 
addition, the Agreement requires the Company and Clothing Co., the Company's 
main operating subsidiary, to maintain tangible net worth, as defined, in 
excess of $151,000,000 and $55,000,000, respectively, as of September 30, 
1997. For fiscal years after 1997, the Agreement requires the Company to 
maintain a tangible net worth in excess of the tangible net worth of the 
preceding fiscal year plus 50% of the Company's consolidated net income. The 
Agreement prohibits the payment of any dividend if a default exists after 
giving effect to such a dividend.

In 1995, the Company completed the sale and issuance of $25,000,000 in senior 
notes (the "Allstate notes"). Proceeds from the notes were used to partially 
fund the construction of the Company's CSC. Significant terms of the 
senior notes include a maturity date of ten years from the date of issuance, 
interest payable semi-annually and annual principal payments beginning in the 
fourth year. The interest rate on the senior notes is fixed at 8.49%. The 
terms and conditions of the note purchase agreement governing the senior 
notes include restriction on the sale of assets, limitations on additional 
indebtedness, and the maintenance of certain net worth requirements.

                                  27

<PAGE>

Principal payments due during the next five years on debt are as follows (in 
thousands):

       Years Ending September 30,        Amount
       --------------------------       -------
       1998                             $   330
       1999                               3,854
       2000                               6,870
       2001                               3,888
       2002                               3,908
       Thereafter                        13,280
                                        -------
       Total                            $32,130
                                        -------
                                        -------

5.  LEASES AND OTHER COMMITMENTS

OPERATING LEASES

The Company leases certain of its manufacturing, computer and automotive 
equipment under agreements which expire at various dates through 2010 and 
which contain options to renew at various terms. The following is a schedule 
of future minimum rental payments required under operating leases at 
September 30, 1997 (in thousands):

       Years Ending September 30,        Amount
       --------------------------       -------
       1998                             $ 6,149
       1999                               5,147
       2000                               4,031
       2001                               2,676
       2002                                 951
       Thereafter                         1,079
                                        -------
                                        $20,033
                                        -------
                                        -------

Rental expense was $6,910,000, $6,410,000 and $4,896,000 in the years ended 
September 30, 1997, 1996 and 1995, respectively.

COMMITMENTS AND CONTINGENCIES

The Company had approximately $20,485,000 in outstanding letters of credit at 
September 30, 1997, primarily in connection with certain self-insurance 
agreements and certain inventory purchases of the Company.

The Company is involved in various claims and lawsuits incidental to its 
business. In the opinion of management, these claims and suits in the 
aggregate will not have a material adverse effect on the Company's financial 
position or the results of operations of the future periods.

6.  RELATED PARTY TRANSACTIONS

The Company paid $136,000 and $327,000 to certain stockholders primarily for 
rent on a building in the fiscal years ended September 30, 1996 and 1995, 
respectively.  No related party payments were made in fiscal 1997.

7.  RESTRUCTURING CHARGES

In 1996, the Company decided to restructure its worldwide manufacturing 
capacity, including consolidation of its three Texas sewing operations into 
one facility. The cost of this restructure, recorded in the year ended 
September 30, 1996, was estimated to be $14,000,000 of which $8,680,000 was 
included in cost of sales and consisting 

                                 28

<PAGE>

principally of severance costs for manufacturing employees and $5,320,000 was 
included in operating expenses related principally to costs to resolve 
various legal issues in connection with the restructuring and prior plant 
closings as well as severance for non-manufacturing employees. The 
consolidation of the three Texas sewing operations was completed in 1997.

As of September 30, 1997, approximately $8.8 million (primarily severance and 
professional fees) of such restructuring costs have been paid or otherwise 
charged against the $14 million accrual.  The remaining obligations are 
currently recorded in accrued liabilities and are expected to be 
substantially paid by September 30, 1998.  The amounts disclosed represent 
management's best estimate of the costs to be incurred.  The actual amounts 
incurred could vary from these estimates if future developments differ from 
the underlying assumptions used by management in developing the accrual.

In fiscal 1995, the Company closed its Robstown, Texas, sewing operation. The 
cost of closing this plant, recorded in the year ended September 30, 1995, 
was approximately $1,244,000, which is included in cost of sales in the 
accompanying Statements of Operations in the year ended September 30, 1995.

8.  EMPLOYEE BENEFIT PLANS

The Company provides a Profit Sharing and Savings Plan (the "Plan") to 
substantially all eligible employees of the Company, as defined. 
Discretionary profit sharing contributions, made by the Company, are 
allocated to eligible plan participants based on their respective 
compensation. The profit sharing contributions vest according to a defined 
vesting schedule. Full vesting occurs at the end of seven years of service or 
upon retirement, death, or disability of plan participants. Participants may 
contribute from 1% to 10% of their compensation to the Plan under Internal 
Revenue Code Section 401(k) ("401(k) Contributions"). The Company may make 
discretionary matching contributions in an amount equal to 50% of each 
participant's 401(k) Contribution. Participant 401(k) Contributions and the 
Company's matching 401(k) Contributions are 100% vested at the date they are 
contributed. The Company contributed approximately $800,000, $700,000 and 
$2,000,000 for each of the years ended September 30, 1997, 1996 and 1995, 
respectively.

The Company also has an Employee Benefits Trust (the "Trust") to provide 
eligible employees of the Company, as defined, with certain welfare benefits. 
Trust contributions are made by the Company as defined by the trust 
agreement. The Company contributed approximately $7,785,000, $10,378,000 and 
$9,100,000 to the Trust for the years ended September 30, 1997, 1996 and 
1995, respectively.

In 1990, SFAS No. 106, "Employers' Accounting for Postretirement Benefits 
Other Than Pensions," was issued to establish standards of financial 
accounting and reporting for an employer that provides postretirement 
benefits other than pensions to its employees. Although the Company provides 
welfare benefits to a limited number of eligible retired employees, as 
defined, such benefits have been insignificant for the years ended September 
30, 1997, 1996 and 1995. Additionally, such benefits are expected to be 
insignificant in future years.

The Company has a noncompensatory employee stock purchase plan to provide 
employees with a convenient way to acquire Company stock through payroll 
deductions. Substantially all employees meeting limited employment 
qualifications may participate in the stock purchase plan.

                                 29

<PAGE>

LONG-TERM INCENTIVE PLAN

The Company has a long-term incentive plan ("Incentive Plan") which 
authorizes the grant of stock options to key employees. The options vest over 
a period of three to five years and expire ten years from the date of grant. 
The options are issued at an exercise price not less than the fair market 
value of the Company's common stock on the date of the grant. The long-term 
incentive plan allows for 1,300,000 shares to be granted. The following table 
summarizes the changes in common stock options in fiscal 1997, 1996 and 1995:

                                                    Weighted Average
                                                    ----------------
                                       Shares     Exercise Option Price
                                      --------    ---------------------
 Options outstanding
  as of September 30, 1994              667,400            $17.50
  Options granted                       244,000             21.63
  Options exercised                     (14,531)            21.37
  Options canceled                      (32,401)            18.33
                                        -------            ------
 Options outstanding as
  of September 30, 1995                 864,468             18.64
  Options granted                       109,000             16.26
  Options canceled                       (7,000)            17.50
                                        -------            ------
 Options outstanding as
  of September 30, 1996                 966,468             18.38
  Options granted                       514,938             13.51
  Options canceled                     (716,469)            18.15
                                        -------            ------
 Options outstanding as
  of September 30, 1997                 764,937            $15.32
                                        -------            ------
 Options available for grant
  as of September 30, 1997              510,532
 Options exercisable as of
  September 30, 1997                    196,932            $18.73
                                                           ------
 
The range of option prices for the options outstanding as of September 30, 
1997, was $12.13 to $37.88 with a weighted average remaining contractual life 
of approximately 6 years. The number of stock options exercisable in fiscal 
1996 and 1995 are 466,770 and 233,716, respectively. The weighted average 
exercise option prices for 1996 and 1995 were $18.16 and $17.39. During fiscal 
1997, the Company canceled 521,134 options and reissued 423,938 options in 
place of the original options at a reduced option price of $13.50 which was 
the fair market value on the date of the reissuance.

The Company accounts for the stock option plan under Accounting Principles 
Board Opinion No. 25, under which no compensation cost has been recognized. 
Had compensation cost for these options been determined consistent with SFAS 
No. 123, "Accounting for Stock-Based Compensation," the Company's net income 
and earnings per share would have been reduced to the following pro forma 
amounts (in thousands, except per share amounts):

                              1997                1996
                            -------             --------
Net  Income:
 As reported                $ 3,743             ($2,420)
 Pro Forma                  $ 3,098             ($2,575)
Primary EPS:
 As reported                $  0.44             ($ 0.28)
 Pro Forma                  $  0.36             ($ 0.30)

Because SFAS No. 123 method of accounting has not been applied to options 
granted prior to October 1, 1995, the resulting pro forma compensation cost 
may not be representative of that to be expected in future years.

The fair value of each option grant of $4.64 and $6.94 is estimated on the 
date of grant using the Black-Scholes option pricing model with the following 
weighted average assumptions for 1997 and 1996, respectively:  risk-free 
interest rates of 6.0% and 6.4%; expected lives of 5 years; expected 
volatility of 44 percent; expected dividend rate of $0.20.

                                 30

<PAGE>

The Black-Scholes option valuation model was developed for use in estimating 
the fair value of traded options which have no vesting restrictions and are 
fully transferable.  In addition, option valuation models require input of 
highly subjective assumptions including stock price volatility.  Since the 
Company's employee stock options have characteristics significantly different 
from those of traded options, and because changes in the subjective input 
assumptions can materially affect the fair value estimate, in management's 
opinion, the existing models do not necessarily provide a reliable single 
measure of the fair value of its employee stock options.

                                        31

<PAGE>

                                       
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS






To Haggar Corp.:

We have audited in accordance with generally accepted auditing standards the 
consolidated financial statements of Haggar Corp. (a Nevada corporation) and 
subsidiaries included in this Form 10-K and have issued our report thereon 
dated October 31, 1997.  Our audits were made for the purpose of forming an 
opinion on the basic consolidated financial statements taken as a whole. 
Schedules I and II are the responsibility of the Company's management and are 
presented for purposes of complying with the Securities and Exchange 
Commission's rules and are not part of the basic consolidated financial 
statements.  These schedules have been subjected to the auditing procedures 
applied in the audits of the basic consolidated financial statements and, in 
our opinion, fairly state in all material respects the financial data 
required to be set forth therein in relation to the basic consolidated 
financial statements taken as a whole.

                                              Arthur Andersen LLP
Dallas, Texas
October 31, 1997

                                        32


<PAGE>

                                                                     SCHEDULE I
                                                                    Page 1 of 2


                         HAGGAR CORP. AND SUBSIDIARIES
                                       
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                         HAGGAR CORP. (PARENT COMPANY)
                                BALANCE SHEETS
                       AS OF SEPTEMBER 30, 1997 AND 1996
                                 (IN THOUSANDS)


                                                            1997         1996
                                                            ----         ----
     ASSETS:
     Investment in subsidiaries                        $   64,018    $   65,545
     Note receivable from Haggar Clothing Co.             109,200       100,632
                                                       ----------    ----------
     Total Assets                                      $  173,218    $  166,177
                                                       ----------    ----------
                                                       ----------    ----------

     LIABILITIES AND STOCKHOLDERS' EQUITY
     CURRENT LIABILITIES:
     Dividend payable and other current liabilities    $    6,359    $    3,052
     Due to subsidiaries                                    2,345           643
                                                       ----------    ----------
         Total current liabilities                          8,704         3,695
     STOCKHOLDERS' EQUITY:
       Common stock                                           856           856
       Additional paid-in capital                          41,641        41,641
       Retained earnings                                  122,018       119,986
       Less - treasury stock                                   (1)           (1)
                                                       ----------    ----------
         Total stockholders' equity                       164,514       162,482
                                                       ----------    ----------
     Total Liabilities and Stockholders' Equity        $  173,218    $  166,177
                                                       ----------    ----------
                                                       ----------    ----------

                                               33

<PAGE>

                                                                     SCHEDULE I
                                                                    Page 2 of 2

                         HAGGAR CORP. AND SUBSIDIARIES
                                       
                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                         HAGGAR CORP. (PARENT COMPANY)
                           STATEMENTS OF OPERATIONS
             FOR THE YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
                                 (IN THOUSANDS)
                                       
                                       
                                         1997         1996        1995
                                      ---------   ----------   ---------

Equity in earnings of subsidiaries    $  (1,526)  $  (7,296)   $  5,011

Interest income                           8,568       7,928       7,497
Income tax expense                       (3,299)     (3,052)     (2,699)
                                      ---------   ----------   ---------
 Net income (loss)                    $   3,743   $  (2,420)   $  9,809
                                      ---------   ----------   ---------
                                      ---------   ----------   ---------

                                            34

<PAGE>
                                                                    SCHEDULE II

                         HAGGAR CORP. AND SUBSIDIARIES
                                       
                       VALUATION AND QUALIFYING ACCOUNTS
                    AS OF SEPTEMBER 30, 1997, 1996 AND 1995
                                (IN THOUSANDS)
                                       

<TABLE>
<CAPTION>

                                                         Balance at     Charges to                 Balance at
                                                        Beginning of    Costs and      Deductions    End of
                                                          Period        Expenses           (1)       Period
                                                        ------------   ----------     -----------  -----------
  <S>                                                   <C>            <C>            <C>           <C>
  September 30, 1997:
    Allowance for doubtful accounts                       $  900       $  (380)         $  411      $  931

  September 30, 1996
    Allowance for doubtful accounts                        1,201          (686)            385         900

  September 30, 1995:
    Allowance for doubtful accounts                        1,284           792            (875)      1,201

    (1)  Amounts deemed uncollectible and recoveries of previously 
         reserved amounts.
                                                                                                                                   
</TABLE>

                                                    35

<PAGE>

       
ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURES

None.




                                   PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by Part III, Item 10 is incorporated by reference 
from the Registrant's definitive proxy statement to be filed with the 
Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by Part III, Item 11 is incorporated by reference 
from the Registrant's definitive proxy statement to be filed with the 
Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
            MANAGEMENT

The information required by Part III, Item 12 is incorporated by reference 
from the Registrant's definitive proxy statement to be filed with the 
Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Part III, Item 13 is incorporated by reference 
from the Registrant's definitive proxy statement to be filed with the 
Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report.

                                       36

<PAGE>

                                    PART IV

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

(a)(1) FINANCIAL STATEMENTS

                                                                          Pages

       Report of Independent Public Accountants.                            17
       Consolidated Statements of Operations,
         Years Ended September 30, 1997, 1996 and 1995.                     18
       Consolidated Balance Sheets, at September 30, 1997 and 1996.         19
       Consolidated Statements of Stockholders' Equity,
         Years Ended September 30, 1997, 1996 and 1995.                     20
       Consolidated Statements of Cash Flows,
         Years Ended September 30, 1997, 1996 and 1995.                     21
       Notes to Consolidated Financial Statements.                       22-31

   (2) FINANCIAL STATEMENT SCHEDULES

       Report of Independent Public Accountants.                            32
       Schedule I - Condensed Financial Information of Registrant -
         Haggar Corp. (Parent Company).                                  33-34
       Schedule II - Valuation and Qualifying Accounts.                     35

       Schedules not included with this additional financial data have been
       omitted because they are not applicable or the required information is
       shown in the Consolidated Financial Statements or Notes thereto.

   (3) EXHIBITS
         3(a)  Third Amended and Fully Restated Articles of Incorporation.
               (Incorporated by reference from Exhibit 3(a) to the Company's
               Annual Report on Form 10-K for the fiscal year ended September
               30, 1993 [File No. 0-20850].)

         3(b)  Bylaws of the Company, as amended. (Incorporated by reference 
               from Exhibit 3(b) to the Company's Annual Report on Form 10-K 
               for the fiscal year ended September 30, 1994 [File No. 0-20850].)

         4(a)  Specimen Certificate evidencing Common Stock (and Preferred Stock
               Purchase Right). (Incorporated by reference from Exhibit 4(a) to
               the Company's Annual Report on Form 10-K for the fiscal year
               ended September 30, 1994 [File No. 0-20850].)

         4(b)  Form of Stockholders' Rights Agreement. (Incorporated by 
               reference from Exhibit 4(b) to the Company's Pre-Effective 
               Amendment No. 1 to Form S-1, filed with the Security and Exchange
               Commission on November 16, 1992 [Registration No. 33-52704].)

         4(c)  Note Purchase Agreement dated December 22, 1994, among Haggar 
               Apparel Company, Haggar Corp. and Allstate Life Insurance 
               Company. (Incorporated by reference from Exhibit 4(a) to the 
               Company's Quarterly Report on Form 10-Q for the quarter ended 
               December 31, 1994 [File No. 0-20850].)

                                              37

<PAGE>

         4(d)  Note No. 1 dated December 22, 1994, in original principal amount 
               of $10,500,000 executed by Haggar Apparel Company, as maker, and
               Haggar Corp., as guarantor, payable to Allstate Life Insurance
               Company. (Incorporated by reference from Exhibit 4(b) to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1994 [File No. 0-20850].)

         4(e)  Note No. 2 dated December 22, 1994, in original principal amount 
               of $6,500,000 executed by Haggar Apparel Company, as maker, and
               Haggar Corp., as guarantor, payable to Allstate Life Insurance
               Company. (Incorporated by reference from Exhibit 4(c) to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1994 [File No. 0-20850].)

         4(f)  Note No. 3 dated December 22, 1994, in original principal amount 
               of $4,800,000 executed by Haggar Apparel Company, as maker, and
               Haggar Corp., as guarantor, payable to Allstate Life Insurance
               Company. (Incorporated by reference from Exhibit 4(d) to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1994 [File No. 0-20850].)

         4(g)  Note No. 4 dated December 22, 1994, in original principal amount 
               of $2,200,000 executed by Haggar Apparel Company, as maker, and
               Haggar Corp., as guarantor, payable to Allstate Life Insurance
               Company. (Incorporated by reference from Exhibit 4(e) to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1994 [File No. 0-20850].)

         4(h)  Note No. 5 dated December 22, 1994, in original principal amount 
               of $1,000,000 executed by Haggar Apparel Company, as maker, and
               Haggar Corp., as guarantor, payable to Allstate Life Insurance
               Company. (Incorporated by reference from Exhibit 4(f) to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1994 [File No. 0-20850].)

        10(a)  1992 Long Term Incentive Plan. (Incorporated by reference from 
               Exhibit 10(a) to the Company's Pre-Effective Amendment No. 1 to 
               Form S-1, filed with the Security and Exchange Commission on 
               November 16, 1992 [Registration No. 33-52704].)

        10(b)  Management Incentive Plan. (Incorporated by reference from
               Exhibit 10(b) to the Company's Registration Statement on 
               Form S-1, filed with the Security and Exchange Commission on 
               October 1, 1992 [Registration No. 33-52704].)

        10(c)  Master Letter of Credit Agreement between Philadelphia National 
               Bank and Haggar Apparel Company. (Incorporated by reference from
               Exhibit 10(n) to the Company's Registration Statement on 
               Form S-1, filed with the Security and Exchange Commission on 
               October 1, 1992 [Registration No. 33-52704].)

        10(d)  First Amendment to the 1992 Long-term Incentive Plan. 
               (Incorporated by reference from Exhibit 10(a) to the Company's 
               Quarterly Report on Form 10-Q for the quarter ended March 31, 
               1994  [File No. 0-20850 ].)
               
                                             38

<PAGE>

        10(e)  First Amended and Restated Credit Agreement between the Company 
               and Texas Commerce Bank, as agent for a bank syndicate.
               (Incorporated by reference from Exhibit 10(k) to the Company's
               Annual Report on Form 10-K for the year ended September 30, 1996
               [File No. 0-2850].)

        10(f)  First Amendment to First Amended and Restated Credit Agreement 
               dated December 31, 1996, between the Company and Texas Commerce 
               Bank, as agent for a bank syndicate.

        10(g)  Second Amendment to First Amended and Restated Credit Agreement 
               dated June 30, 1997, between the Company and Texas Commerce Bank,
               as agent for a bank syndicate.

        10(h)  Third Amendment to First Amended and Restated Credit Agreement 
               dated December 15, 1997, between the Company and Texas Commerce 
               Bank, as agent for a bank syndicate.

        10(i)  Commercial Contract of Sale dated effective October 21, 1996,
               between Haggar Clothing Co. and Bruce L. Wilson regarding land
               and storage building.

        10(j)  Commercial Contract of Sale dated effective January 28, 1997,
               between Haggar Clothing Co. and National Fibernet, Inc.
               regarding land and manufacturing building.

        11     Statement Regarding Computation of Net Income (Loss) Per
               Common Share.

        23     Consent of independent public accountants.

  (b)  REPORTS ON FORM 8-K

       There were no reports on Form 8-K filed with the Commission during the
       fourth quarter of fiscal 1997.

                                       39
                                       
<PAGE>
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                      THIS PAGE INTENTIONALLY LEFT BLANK.
                                       






                                        40

<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.

                                HAGGAR CORP.
                                (Registrant)



                               By:  /s/ DAVID M. TEHLE
                                  --------------------------------------------
                                        David M. Tehle, December 19, 1997
                                (SENIOR VICE PRESIDENT, CHIEF FINANCIAL 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                       Title                                     Date
---------------------------   -------------------------------              ----------------------
<S>                           <C>                                          <C>

/s/    J. M. HAGGAR, III      Chairman and                                  December 19, 1997
----------------------------  Chief Executive Officer
      J. M. Haggar, III       (Principal Executive Officer)



/s/    FRANK D. BRACKEN       Director, President and                       December  19, 1997
----------------------------  Chief Operating Officer
       Frank D. Bracken       



/s/     DAVID M. TEHLE        Senior Vice President                         December  19, 1997
----------------------------  and Chief Financial Officer (Principal
        David M. Tehle        Financial and Accounting Officer)
                              



/s/   NORMAN E. BRINKER       Director                                      December  19, 1997
----------------------------
      Norman E. Brinker

</TABLE>

                                                   41

<PAGE>

                              HAGGAR CORP. AND SUBSIDIARIES
                                       
                               INDEX TO ATTACHED EXHIBITS



  EXHIBIT                                                                  PAGES

   10(f)  First Amendment to First Amended and Restated Credit Agreement 
          dated December 31, 1996, between the Company and Texas Commerce 
          Bank, as Agent for a bank syndicate.

   10(g)  Second Amendment to First Amended and Restated Credit Agreement dated 
          June 30, 1997, between the Company and Texas Commerce Bank, as agent 
          for a bank syndicate.

   10(h)  Third Amendment to First Amended and Restated Credit Agreement dated 
          December 15, 1997, between the Company and Texas Commerce Bank, as 
          agent for a bank syndicate.

   10(i)  Commercial Contract of Sale dated effective October 21, 1996, between 
          Haggar Clothing Co. and Bruce L. Wilson regarding land and storage 
          building.
          

   10(j)  Commercial Contract of Sale dated effective January 28, 1997, between 
          Haggar Clothing Co. and National Fibernet, Inc., regarding land and 
          manufacturing building.

   11     Statement Regarding Computation of Net Income (Loss) Per Common Share.
          

   23     Consent of Independent Public Accountants
          

                                               42