_____________________

(Exact name of registrant as specified in its charter)

(Address of principal executive offices)

(Registrant's telephone number)

______________

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for at least 90 days.

Yes X No_____

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

The aggregate market value of the voting stock of registrant held by nonaffiliates of the registrant as of April 3, 2000 was approximately $202,000,000.

Number of shares of Common Stock outstanding as of April 3, 2000:

27,289,869.

* * *

Forward-looking statements in this Form 10-K report including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, the following: (i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the levels of sales of the Company's apparel and footwear products, both to its wholesale customers and in its retail stores, and the extent of discounts and promotional pricing in which the Company is required to engage, all of which can be affected by weather conditions, changes in the economy, fashion trends and other factors; (iii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth and inventory; and (iv) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.

Unless the context otherwise requires, the term "Company" means Phillips-Van Heusen Corporation ("PVH") and its subsidiaries ("Subsidiaries"). The Company's fiscal year is based on the 52-53 week period generally ending on the Sunday on or closest to January 31 and is designated by the calendar year in which the fiscal year commences. The Company derives market share data information used herein from various industry sources.

The Company is a leading marketer of men's, women's and children's apparel and footwear. Its roster of brands includes Van Heusenâ , the number one dress shirt in America; G.H. Bass & Co.â , the leading brand of men's, women's and children's casual footwear; Geoffrey Beeneâ , the leading designer dress shirt label; DKNYâ dress shirts, the fastest growing dress shirt brand in American department stores; and IZODâ , a leading sportswear brand. The Company also markets dress shirts under the John Henryâ and Manhattanâ brands, and has just begun marketing FUBUâ dress shirts in the Spring of 2000.

The Company is brand focused, managing the design, sourcing and manufacturing of substantially all of its products on a brand by brand basis. The Company's products include dress, sport and knit shirts, casual shoes and, to a lesser extent, sweaters, neckwear, furnishings, bottoms, outerwear and leather and canvas accessories. Approximately 23% of the Company's net sales in fiscal 1999 were derived from sales of dress shirts, 30% from sales of footwear and related products and 47% from sales of other apparel goods, primarily branded sportswear. The Company markets its products at a wholesale level through national and regional department store chains and also directly to consumers through its own retail stores, generally located in factory

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outlet retail malls. The Company also presently markets Bass and Izod products through the Internet on a limited basis. The Company believes that marketing through the wholesale channel provides the opportunity to build brand equity and represents its core business, and views its retail business as a complement to its strong branded positions in the wholesale market.

The Company owns the Van Heusen (in the Americas), Bass and Izod brand trademarks. The Geoffrey Beene brand is licensed for dress shirts and men's and women's sportswear under agreements with Geoffrey Beene, Inc., the DKNY brand is licensed for dress shirts under an agreement with Donna Karan Studio, the John Henry and Manhattan brands are licensed for dress shirts under an agreement with Perry Ellis International and FUBU is licensed for dress shirts under an agreement with GTFM, LLC.

The Company's principal brands enjoy national recognition in their respective sectors of the market. In the United States, Van Heusen is the best-selling dress shirt brand and one of the best-selling men's woven sport shirt brands, and Geoffrey Beene is the best-selling designer dress shirt brand. The Company believes that it is the largest supplier of dress shirts, including its branded, designer and private label offerings, in the United States. Izod is one of the best-selling men's sweater brands and one of the best-selling men's basic knit shirts in the United States. Bass is a leading brand of men's, women's and children's casual shoes at the moderate price range in the United States. In addition, the Izod Club brand, which the Company owns and licenses to Oxford Industries, is a leading golf apparel brand in pro shops and resorts.

The Company markets its brands to different segments of the market, appealing to varied demographic sectors and a broad spectrum of consumers. This diversity of the Company's brands is intended to minimize competition among the brands. The Van Heusen brand, designed to target the moderate price range, appeals to a fashion sensitive 'middle American' consumer. The typical Bass consumer is fashion conscious with a sense of individuality, attitude and a youthful, spirited point of view. The Company's Izod brand is 'active inspired', designed to sell on the main floor of department stores largely in knitwear categories in the moderate to upper moderate price range. Geoffrey Beene is designed for a more fashion-forward consumer and is targeted to the upper moderate price range. The Company's products are designed to appeal to relatively stable demographic sectors and generally are not reliant on rapidly changing fashion trends.

Consistent with its strategy of developing its brands, the Company has focused on the wholesale sector -- primarily department stores -- as the key source of distribution for its products. The Company believes that the wholesale channel generally, and department stores specifically, provide the best means of promoting a fully conceptualized image for each of its brands and of securing broad awareness of its products and image. The Company's wholesale customers for its products include May Co., Federated, JC Penney, Belk's, Dillard's and Saks, Inc.

While focused on the wholesale sector, the Company also sells its products directly to consumers in Company-owned stores located primarily in factory outlet retail malls. At the end of fiscal 1999, the Company operated 646 stores. The stores are operated in four brand formats -- Van Heusen, Bass, Izod and Geoffrey Beene. Van Heusen and Bass, followed by Izod, are in the broadest range of malls. Geoffrey Beene stores are located in malls in

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geographic areas where that brand has greater name recognition. The Company believes its retail presence is an important complement to its strong branded positions in the wholesale market, facilitating product experimentation, the gathering of market intelligence and effective inventory control.

The Company was incorporated in the State of Delaware in 1976 as the successor to a business begun in 1881, and, with respect to Bass, a business begun in 1876. The Company's principal executive offices are located at 200 Madison Avenue, New York, New York 10016; its telephone number is (212) 381-3500.

The Company's dress shirts currently are marketed principally under the Van Heusen, Geoffrey Beene, DKNY, John Henry, Manhattan and FUBU brands. The Van Heusen and Geoffrey Beene brands are the leaders in men's dress shirts in their respective categories, with a combined 1999 unit share in the key United States department store sector of 30%, while the DKNY brand increased its share to 3% from less than 1% in 1998. In addition, the Company markets its dress shirts under the Etienne Aigner brand and through private label programs.

Van Heusen brand dress shirts have provided a strong foundation for the Company for most of its history and now constitute the best-selling dress shirt brand in the United States. The Van Heusen dress shirt is marketed at wholesale in the moderate price range to major department stores and men's specialty stores nationwide, including Federated, May Co., JC Penney, Saks, Inc., Belk's and Mervyns. Its primary competitors are 'Arrow' brand and private label shirts.

The Company markets Geoffrey Beene brand men's dress shirts under a license agreement with that designer, which expires in 2003, and which may be extended, at the Company's option, through 2013. Geoffrey Beene dress shirts are the best-selling designer dress shirts in the United States. Geoffrey Beene dress shirts are sold in the upper moderate price range to major department stores and men's specialty stores nationwide, including Federated, Dayton's, May Co. and Saks, Inc.

DKNY brand dress shirts are sold in the better price range to major department stores and men's specialty stores nationwide, including Federated, May Co. and Saks, Inc. DKNY dress shirts are targeted to younger and more contemporary customers. John Henry brand dress shirts are sold in the moderate price range, primarily to Sears. Manhattan brand dress shirts are sold in the lower price range to discount chains, including Wal-Mart and K- Mart. FUBU brand dress shirts, which are now first being introduced, are sold in the better price range to department stores, including Federated and JC Penney.

Private label programs offer the retailer the ability to create its own line of exclusive merchandise and give the retailer control over distribution of the product. Private label represents an opportunistic business which leverages the Company's strong design and sourcing expertise. The Company's

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customers work with the Company's designers to develop shirts in the styles, sizes and cuts which the customers desire to sell in their stores with their particular store names or private labels. Private label programs offer the consumer quality product and offer the retailer the opportunity to enjoy higher margins and product exclusivity. Private label products, however, do not have the same level of consumer recognition as branded products and private label manufacturers do not generally provide retailers with the same breadth of services and in-store sales and promotional support as branded manufacturers. The Company markets at wholesale dress shirts under private labels to major national retail chains and department stores, including JC Penney, Sears, May Co. and Federated. The Company believes it is one of the largest marketers of private label dress shirts in the United States.

The Company's sportswear products are marketed principally under the Van Heusen, Izod and Geoffrey Beene brands.

Van Heusen is one of the best-selling men's woven sport shirt brands in the United States. Van Heusen apparel also includes knit sport shirts, sweaters and golf apparel. Like Van Heusen branded dress shirts, Van Heusen branded sport shirts and sweaters are marketed at wholesale in the moderate price range to major department stores and men's specialty stores nationwide, including JC Penney, Mervyns, May Co., Belk's and Federated. The Company believes that the main floor classification business in department stores is becoming increasingly important and that there are few important brands in that category. As a result, the Company believes that the success of Van Heusen dress shirts in department stores where it is part of the stores' classification offerings supports its presence in the department stores' sportswear classification offerings and presents a significant opportunity for further development.

The product mix targeted for the Company's Van Heusen stores is intended to satisfy the key apparel needs of men from dress furnishings to sportswear and of women for sportswear. Van Heusen stores' merchandising strategy is focused on achieving a classic and/or updated traditional look in a range of primarily moderate price points. Target customers represent the broadest spectrum of the American consumer.

Izod occupies a major presence in department stores as a main floor lifestyle classification sportswear brand. Izod branded apparel products consist of active inspired men's and women's sportswear, including sweaters, knitwear, slacks, fleecewear and microfiber jackets. Izod men's sweaters and knit shirts are among the best selling products in their categories in the United States. Izod products are marketed in the moderate to upper moderate price range in major department store locations, including May Co., Federated, JC Penney, Saks, Inc. and Belk's.

The Company continues to grow its Izod product line beyond the core of the pique knit shirt and, as a result, has expanded its wholesale customer base significantly. The Company has expanded the Izod brand to include apparel appropriate for the fall and winter seasons, including long-sleeve knit shirts, fleecewear and microfiber jackets.

The Company's Izod stores offer men's and women's golf apparel appropriate for playing the game and sportswear suitable for business and casual

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occasions. The product assortments cater to men and women with fashionable, classic taste, and are marketed in the moderate to upper moderate price category.

Geoffrey Beene brand sportswear is marketed at wholesale under the same license agreement as Geoffrey Beene dress shirts. Products are marketed in the upper moderate price range in department and men's specialty stores, including Federated and Daytons, and include men's sport shirts and knit tops.

The Company's Geoffrey Beene stores offer men's and women's apparel and accessories. Men's apparel is comprised of dress shirts and furnishings, as well as casual and dress casual sportswear, while the women's product mix is a combination of casual and dress casual sportswear. The merchandising strategy is focused on an upscale, fashion forward consumer who is prepared to purchase apparel in the upper moderate price range. The Company offers Geoffrey Beene products in its stores under a license agreement which expires in 2002 and is renewable, at the Company's option, through 2011.

The Company's extensive resources in both product development and sourcing have permitted it to market successfully private label sport shirts to major retailers, including Wal-Mart, Target and Sears. The Company also markets private label sport shirts to companies in service industries, including major airlines and food chains. The Company believes it is one of the largest marketers of private label sport shirts in the United States.

The Company markets a broad range of updated casual and dress casual shoes and related products for men, women and children under the Bass brand. The brand has a long history of highly recognizable and innovative products. Bass is a leading brand of men's, women's and children's casual shoes at the moderate price range in the United States.

With the continued trend to a more casual workplace, the Company believes Bass is well-positioned to deliver appropriate fashion products. Modern and contemporary styled footwear is leading the market while traditional and classic styles of footwear continue to be less important. The Bass brand's updated casual and dress casual footwear assortments fit directly into this trend.

Bass' traditional wholesale customers are major department stores and specialty shoe stores throughout the United States, including Federated, May Co., Dillard's, Belk's and Saks, Inc. The Company also markets its Bass footwear internationally to retailers in Europe, Canada, South America, the Middle East, Africa and Asia. All Bass footwear is designed in-house to maintain tight control of the styling and quality offered by the brand.

The Company's Bass stores typically carry a modified assortment of Bass footwear from its wholesale lines, as well as styles not available in the wholesale lines in the moderate price range. The stores also carry apparel and accessories for men, women and children and other complementary products not sold to wholesale customers.

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The apparel industry is highly competitive due to its fashion orientation, its mixture of large and small producers, the flow of domestic and imported merchandise and the wide diversity of retailing methods. Some of the larger dress shirt competitors include: Cluett American ('Arrow' brand); Salant Corporation ('Perry Ellis' brand); Smart Shirt (private label shirt division of Kellwood); Capital Mercury (private label shirts); and Oxford Industries (private label shirts). Some of the larger sportswear competitors include: Warnaco ('Chaps' brand); Supreme International ('Natural Issue' brand), 'Arrow' sport shirts and various private label competitors, including Smart Shirt and Capital Mercury.

The footwear industry is characterized by fragmented competition. Consequently, retailers and consumers have a wide variety of choices regarding brands, style and price. However, over the years, Bass has maintained its important position in the casual footwear market, while extending the brand's offerings in modern, contemporary casual and dress casual styles. Few of its competitors have the overall men's and women's brand recognition of Bass. The Company's primary competitors include Dexter, Timberland, Rockport and Sperry. The Company believes, however, that it has a more extensive line of footwear for both genders and children and in a broader price range than any of its competitors.

Based on the variety of the apparel and footwear marketed by the Company, the various channels of distribution it has developed, its logistics and sourcing expertise, and the strength of the Company's brands, the Company believes it is particularly well-positioned to compete in the apparel and footwear industries.

The Company employs separate teams of designers, product line builders and merchandise product development groups for each of its brands, creating a structure that focuses on the brand's special qualities and identity. These designers, product line builders and product developers consider consumer taste, fashion trends and the economic environment when creating a product plan for a particular season for their brand. The Company also employs sourcing specialists for each brand who focus on the manufacturing and sourcing needs of the particular brand. In addition, the Company operates a world-wide network of foreign offices and buying agents for purposes of providing technical support and quality control to those sourcing specialists. The merchandise manufactured by the Company, as well as the vast majority of its sourced products, are planned, designed and sourced through the efforts of its various merchandise/product development and sourcing groups.

The process from initial design to finished product varies greatly, but generally spans nine to 12 months prior to each selling season. Apparel and footwear product lines are developed primarily for two major selling seasons, spring and fall. However, certain Company product lines require more frequent introductions of new merchandise. Raw materials and production commitments are generally made four to 12 months prior to production and quantities are finalized at that time. In addition, sales are monitored regularly at both the retail and wholesale levels and modifications in production can be made both to increase or reduce inventories.

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A portion of the Company's dress shirts are manufactured in the Company's domestic apparel manufacturing facility in Alabama as well as Company- owned facilities in Costa Rica and Honduras. However, most of the Company's dress shirts and substantially all of its sportswear are sourced and manufactured to the Company's specifications by independent manufacturers in the Far East, Middle East and Caribbean areas who meet its quality and cost requirements. Footwear is manufactured by independent manufacturers which meet the Company's quality and cost requirements, principally located in Italy, the Far East and Brazil.

The Company's foreign offices, located principally in Hong Kong, China, Taiwan, the Philippines, Central America and the Asian Subcontinent enable the Company to monitor the quality of the goods manufactured by, and the delivery performance of, its suppliers. The Company continually seeks additional suppliers throughout the world for its sourcing needs and places its orders in a manner designed to limit the risk that a disruption of production at any one facility could cause a serious inventory problem. The Company has not experienced significant production delays or difficulties in importing goods. The Company's purchases from its suppliers are effected through individual purchase orders specifying the price and quantity of the items to be produced. Generally, the Company does not have any long-term, formal arrangements with any of the suppliers which manufacture its products. The Company believes that it is the largest customer of many of its manufacturing suppliers and that its long-standing relationships with its suppliers provide the Company with a competitive advantage over its competitors. No single supplier is critical to the Company's production needs, and the Company believes that an ample number of alternative suppliers exist should the Company need to secure additional or replacement production capacity.

The Company purchases raw materials, including fabric, buttons, thread, labels, yarn, piece goods and leather, from domestic and foreign sources based on quality, pricing and availability (including quotas and duties). The Company believes it is one of the largest procurers of shirting fabric worldwide and purchases the majority of its shirting fabric from overseas manufacturers, due, principally, to decreased domestic production. The Company monitors factors affecting textile production and imports and remains flexible in order to exploit advantages in obtaining materials from different suppliers and different geographic regions. No single supplier of raw materials is critical to the Company's production needs and the Company believes that an ample number of alternative suppliers exist should the Company need to secure additional or replacement raw materials.

The Company advertises primarily in national print media, including fashion, entertainment/human interest, business, men's, women's and sports magazines. The Company continues its efforts in cooperative advertising, as it believes that brand awareness and in-store positioning are further supplemented by the Company's continuation of such a program.

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In the Company's retail sector, the Company relies upon local outlet mall developers to promote traffic for their centers. Outlet center developers employ multiple formats, including signage (highway billboards, off- highway directional signs, on-site signage and on-site information centers), print advertising (brochures, newspapers and travel magazines), direct marketing (to tour bus companies and travel agents), radio and television, and special promotions.

The Company has the exclusive right to use the Van Heusen name in North, Central and South America as well as in the Philippines, the exclusive worldwide right to use the Bass name for footwear and the exclusive worldwide right to use the Izod name for apparel. The Company has registered or applied for registration of these and numerous other trademarks for use on a variety of items of apparel and footwear and related products and owns many foreign trademark registrations. The Company regards its trademarks and other proprietary rights as valuable assets and believes that they have significant value in the marketing of its products.

The Company has various agreements under which it licenses the use of its brand names. The Company licenses the Van Heusen name for apparel products in Canada and in most of the South and Central American countries. In the United States, the Company currently licenses the use of the Van Heusen name for various products that it does not manufacture or source, including boy's apparel, pants, sleepwear, eyeglasses, neckwear, belts and small leather goods and is exploring the possibility of licensing the name for use on other products. The Company licenses the use of the Izod name for infants, toddlers and children's clothing, 'big and tall' apparel, men's headwear, eyeglasses and sleepwear in the United States, and for men's and women's sportswear in Canada. The Company licenses the use of the Izod Club name for men's and women's golf apparel in the United States and sublicenses the FUBU name for neckwear.

The Company plans to continue expanding its worldwide marketing efforts, utilizing licensing and other techniques for all its brands, especially under the Izod trademark. A substantial portion of sales by its domestic licensing partners are made to the Company's largest customers. While the Company has significant control over its licensing partners' products and advertising, it relies on its licensing partners for, among other things, operational and financial control over their businesses. Although the Company believes in most circumstances it could replace existing licensing partners if necessary, its inability to do so for any period of time could adversely affect the Company's revenues both directly from reduced licensing revenue received and indirectly from reduced sales of the Company's other products. To the extent the equity and awareness of each of the Company's brands grows, the Company expects to gain even greater opportunities to build on its licensing efforts.

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A substantial portion of the Company's products is manufactured by contractors located outside the United States. These products are imported and are subject to United States Customs laws, which impose tariffs as well as import quota restrictions for textiles and apparel established by the United States government. In addition, a portion of the Company's apparel products are imported from Central America and Mexico and are therefore eligible for certain duty-advantaged programs commonly known as '9802 Programs' and NAFTA benefits for imports from Mexico. While importation of goods from certain countries from which the Company obtains goods may be subject to embargo by United States Customs authorities if shipments exceed quota limits, the Company closely monitors import quotas and can, in most cases, shift production to contractors located in countries with available quotas. The existence of import quotas has, therefore, not had a material adverse effect on the Company's business.

As of January 30, 2000, the Company employed approximately 6,200 persons on a full-time basis and approximately 3,600 persons on a part-time basis. Approximately 4% of the Company's 9,800 employees are represented for the purpose of collective bargaining by three different unions. Additional persons, some represented by these three unions, are employed from time to time based upon the Company's manufacturing schedules and retailing seasonal needs. The Company believes that its relations with its employees are satisfactory.

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The Company maintains its principal executive offices at 200 Madison Avenue, New York, New York, occupying approximately 132,000 square feet under a lease which expires on May 31, 2014. The Company also maintains administrative offices in Bridgewater, New Jersey, where the Company occupies a building of approximately 153,000 square feet under a lease which expires on July 30, 2007 and in South Portland, Maine, where the Company occupies a building of approximately 99,000 square feet under a lease which expires on October 1, 2008. The following tables summarize the manufacturing facilities, warehouses and distribution centers, administrative offices and retail stores of the Company:

Information with respect to minimum annual rental commitments under leases in which the Company is a lessee is included in the note entitled "Leases" in the Notes to Consolidated Financial Statements included in Item 8 of this report.

The Company is a party to certain litigation which, in the Company's judgment, will not have a material adverse effect on the Company's financial position.

None.

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Certain information with respect to the market for the Company's common stock, which is listed on the New York Stock Exchange, and related security holder matters appear under the heading "Selected Quarterly Financial Data" on page F-19 and under the heading "Ten Year Financial Summary" on pages F-21 and F-22. As of April 3, 2000, there were 1,335 stockholders of record of the Company's common stock.

Selected Financial Data appears under the heading "Ten Year Financial Summary" on pages F-21 and F-22.

The following adjusted statements of operations and segment data segregate pre-tax non-recurring charges of $132.7 million incurred in 1997 from the Company's ongoing operations. The non-recurring charges related principally to a series of actions the Company had taken to accelerate the execution of its ongoing strategy to build its brands. Such charges have been shown as separate components of selling, general and administrative expenses in the 1997 consolidated income statement except for $46.0 million of non-recurring charges related to inventory markdowns that was included in cost of goods sold. The review which follows discusses the Company's results of operations before such charges.

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Fiscal 1999 was a year of progress and strategic alignment for each of our brands. The Company's overall strategic objective, to market its nationally known brands in the moderate to upper moderate price segment through multiple channels of distribution while earning appropriate financial returns, is on track and moving forward.

This past year saw the Company exit two businesses which neither fit within this overall strategic framework nor had prospects of earning appropriate and consistent levels of profitability.

• In the first quarter of 1999, the Company sold Gant to Pyramid Sportswear AB, which was the brand's international licensee, for $71 million, while retaining a 19% equity interest in Pyramid. Over the last three years, the Gant division had operated at a breakeven to a small loss. This transaction eliminated a business which was underperforming and was most susceptible to risk as it operated in the highly competitive collection sportswear arena.

• In the fourth quarter of 1999, the Company announced the licensing of the Izod Club brand to Oxford Industries. Izod Club, the golf apparel for men and women sold exclusively to resorts and country clubs, had recorded operating losses of approximately $1.0 million in each of the last three years. The licensing agreement enables the Company to control the Izod Club product and marketing, thereby maintaining its authenticity in the golf arena, while providing for guaranteed royalty income of $1.5 million annually. It also freed up $15 million of working capital as the Company exited a business with a slow working capital turn.

During the year the Company expanded the scope of its dress shirt operations, leveraging its considerable strength and expertise in this area by adding three strong labels through the signing of new licensing agreements for John Henry and Manhattan in March and FUBU in June. Each of these brands adds both channel and consumer diversification to a dress shirt division which already markets Van Heusen, the number one dress shirt brand in America, Geoffrey Beene, the number one designer dress shirt brand in America and DKNY, the fastest growing dress shirt brand in America.

From an overall operating standpoint, each of the Company's divisions exhibited progress in both market position and improved profitability, while cash flow was also a major highlight for the year.

• The Apparel segment recorded a 10.6% increase in operating income compared with the prior year, with each division contributing to that increase. Additionally, operating income margin improved for the third consecutive year, up 70 basis points to 6.3% from 5.6% in 1998 which was up from 5.0% in 1997. The elimination of the underperforming Gant and Izod Club divisions and the continued leveraging of our dress shirt and sportswear businesses should allow for continued operating margin improvement in year 2000 and beyond. Market share gains were experienced by Van Heusen, Izod and DKNY in their respective apparel categories.

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• Operating income for the Footwear and Related Products segment improved 8.7% over the prior year, driven by an almost 200 basis point improvement in gross margin. Gross margins were positively impacted by the lack of significant promotional and inventory clearance activity which had plagued Bass for the previous two years. In addition, the closure of Bass' two remaining footwear manufacturing facilities during 1999 had a positive effect in the second half of the year. This should also provide significant future gross margin benefits through reduced product cost in 2000 and beyond. The resulting sourcing configuration should provide Bass with increased flexibility to profitably source its men's, women's and children's footwear lines. From a marketing standpoint, Bass footwear achieved great success in the men's footwear market. For 1999, Bass maintained its number one market share in the men's dress casual footwear segment at 20%, with unit volume up 11% versus the prior year, and with 8 shoes in the top 25 sellers during the Fall season.

• Cash flow was very much a highlight in 1999, with the Company generating $104 million of positive cash flow. Excluding the net proceeds of $65 million received from the sale of Gant, the remaining $39 million of cash was generated principally from tight management of working capital as well as the added benefit of liquidating Izod Club working capital.

The accomplishments of 1999 are far reaching and we believe set the stage for future growth and profitability in each component of our business.

The Company manages and analyzes its operating results by two vertically integrated business segments: (i) Apparel and (ii) Footwear and Related Products.

Net sales of the Apparel segment, excluding sales from exited businesses, were $804.9 million in 1999 compared with $773.2 million in 1998, or up 4%. This compares with $754.9 million in 1997. The increase in 1999 resulted from an increase in dress shirt sales which included the John Henry and Manhattan brands which the Company began selling in the second quarter of 1999, and the continued growth of the DKNY business. The sales increases in 1999 and 1998 were partially offset by the planned closure of 101 underperforming retail outlet stores during the three year period ended January 30, 2000. At the same time, the Company's sales of wholesale branded products, excluding exited businesses, increased 12% and 11% in 1999 and 1998, respectively, with Van Heusen, Geoffrey Beene and Izod contributing to the improvement.

Gross margin increased to 34.2% in 1999 from 33.3% in 1998 and 32.9% in 1997. The margin improvement was shared by each division with the exception of the businesses exited - Gant and Izod Club. The dress shirt business continued to benefit from the manufacturing reconfiguration and re- sourcing initiatives it began a number of years ago. Sportswear margins benefited from both strong sell-throughs during the year as well as improved sourcing costs. Selling, general and administrative expenses as a percentage of sales were relatively flat in 1999 at 27.9% compared with 27.7% in 1998 and 27.9% in 1997.

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Operating income increased 10.6% in 1999 to $55.6 million from $50.3 million in 1998 which was up 10.8% from $45.4 million in 1997. In 1999, Geoffrey Beene, Izod and Van Heusen experienced significant operating income margin improvements which were partially offset by negative performances at Gant and Izod Club, which were exited during 1999.

Our dress shirt leadership position with the Van Heusen and Geoffrey Beene brands continues and has been joined by strong first full year sales of DKNY dress shirts. The licensing of the John Henry, Manhattan and FUBU brands in 1999 should enable us to further leverage our dress shirt strengths and expertise.

Net sales of the Footwear and Related Products segment declined 5% to $385.7 million in 1999 from $406.2 million in 1998 compared with $439.0 million in 1997. Sales in 1999 were lower than 1998 levels which were artificially fueled by high levels of promotional and inventory clearance activity. The planned closing of 30 underperforming retail outlet stores during the three year period ended January 30, 2000 was also a factor in the Bass sales reductions in 1999 and 1998.

As a result of the improved sales mix, gross margin was up almost 200 basis points to 38.0% in 1999 from 36.1% in 1998 compared with 36.0% in 1997. Selling, general and administrative expenses as a percentage of sales increased to 33.2% in 1999 from 31.9% in 1998 and 32.5% in 1997. The increase in 1999 was principally the result of a lack of sales leverage as actual spending was down 1.2%, or $1.6 million for the year.

Bass continued its profit improvement with an 8.7% increase in operating income to $18.7 million, up from $17.2 million in 1998 and $15.4 million in 1997. While sales declined in 1999, the substantial reduction in promotional and inventory clearance activity resulted in a significant increase in gross margin as a percent of sales. The positive impact on gross margin stemming from the closure of Bass' two remaining manufacturing facilities began to be realized in the second half of 1999, but the full benefit is expected to be felt in 2000 and beyond.

Corporate expenses were $26.0 million in 1999 compared with $24.0 million in 1998 and $15.3 million in 1997. The increased expense level versus 1997 is principally due to the $8.5 million of year 2000 computer conversion costs incurred in each of 1999 and 1998.

Interest expense in 1999 was $22.4 million, down from $26.1 million in 1998 compared with $20.7 million in 1997. The reduction in 1999 was the result of the receipt of the proceeds from the sale of Gant early in the year and tight working capital management throughout the year. The increase in 1998 reflects the impact of funding the Company's 1997 restructuring initiatives, as well as the refinancings completed in the first quarter of 1998 which, while extending maturities, also increased overall borrowing costs.

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The income tax expense rate was 34.8% in 1999, up from 25.8% in 1998 and 23.9% in 1997. The increase in 1999 resulted principally from closing Bass' manufacturing operations in Puerto Rico, which resulted in a higher percentage of pre-tax income being subject to U.S. tax. The full impact of this closing on the effective tax rate will be felt in 2000, during which time the Company believes its effective tax rate will increase to approximately 38.0%.

The Company recorded pre-tax non-recurring charges in 1997 of $132.7 million ($85.5 million after tax) relating principally to exiting the private label sweater manufacturing business and United States mainland footwear manufacturing, consolidating and contracting plant and warehouse and distribution facilities, closing underperforming retail outlet stores, and modifying a repositioning of Bass.

Cash provided by operating activities significantly improved in 1999 and 1998 even after funding Year 2000 computer conversion costs of $8.5 million in each of 1999 and 1998, and funding of the 1997 restructuring initiatives of $9.8 million in 1999 and $34.1 million in each of 1998 and 1997. As a result of these restructuring charges, the Company has tax loss and credit carryforwards of approximately $34 million which will be able to shelter future pre-tax income over the next several years.

Capital spending in 1999 was $31.3 million compared with $38.2 million in 1998 and $17.9 million in 1997. The higher level of 1998 spending relates to the consolidation of all New York office space into a single location. Our new headquarters, at 200 Madison Avenue, provides the Company with more square footage at an annual occupancy cost savings of $500,000, or a 10% reduction compared with 1998 New York occupancy costs. Capital expenditures for 2000 are anticipated at approximately $30 million.

Total debt as a percentage of total capital was 50.7% at year-end 1999 compared with 54.0% at year-end 1998 and 53.0% at year-end 1997. Debt net of invested cash, as a percentage of net capital was 39.0% at year-end 1999 versus 53.6% and 52.9% at year-end 1998 and 1997, respectively.

On February 26, 1999, we completed the sale of Gant to Pyramid Sportswear AB, which was the brand's international licensee. Sale proceeds, net of employee severance and liquidation costs, were approximately $65.3 million, a portion of which was used to reduce debt, with the balance invested in short-term instruments. Additionally, the exiting of the Izod Club business generated cash flow as working capital was liquidated. The combination of the added liquidity provided by these transactions, our strengthened capital structure and internally generated cash provides capital availability for investment opportunities which we believe will yield enhanced shareholder returns.

Financial instruments held by the Company include cash equivalents and long-term debt. Based on the amount of cash equivalents held by the Company

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at January 30, 2000 and the average net amount of cash equivalents which the Company anticipates holding during 2000, the Company believes that a change of 100 basis points in interest rates would not have a material effect on the Company's financial position. The long-term debt footnote to the Company's consolidated financial statements outlines the principal amounts, interest rates, fair values and other terms required to evaluate the expected sensitivity of interest rate changes on the fair value of the Company's fixed rate long-term debt.

The Company's business is seasonal, with higher sales and income in the second half of the year, which coincide with the Company's two peak retail selling seasons: the first running from the start of the back to school and Fall selling seasons beginning in August and continuing through September, and the second being the Christmas selling season beginning with the weekend following Thanksgiving and continuing through the week after Christmas.

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

Information with respect to Quantitative and Qualitative Disclosures About Market Risk appears under the heading "Market Risk" in Item 7.

See page F-1 for a listing of the consolidated financial statements and supplementary data included in this report.

None.

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The following table sets forth certain information concerning the Company's Executive Officers:

Mr. Bruce J. Klatsky has been employed by the Company in various capacities over the last 28 years, and was President of the Company from 1987 to 1998. Mr. Klatsky has served as a director of the Company since 1985 and was named Chief Executive Officer in 1993 and Chairman of the Board of Directors in 1994.

Mr. Mark Weber has been employed by the Company in various capacities over the last 28 years, was named Vice Chairman of the Company in 1995 and was named President and Chief Operating Officer in 1998.

Mr. Emanuel Chirico joined the Company as Vice President and Controller in 1993. Mr. Chirico was named Executive Vice President and Chief Financial Officer in 1998.

Mr. Allen E. Sirkin has been employed by the Company since 1985. He has served as Vice Chairman of the Company since 1995.

Mr. Michael J. Blitzer has been employed by the Company in various capacities since 1980. Mr. Blitzer was named Senior Vice President in 1995 and was named Vice Chairman of the Company in 1998.

Additional information required by Item 10 is incorporated herein by reference to the section entitled "Election of Directors" of the Company's proxy statement for the Annual Meeting of Stockholders to be held on June 13, 2000.

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Information with respect to Executive Compensation is incorporated herein by reference to the sections entitled "Executive Compensation", "Compensation Committee Report on Executive Compensation" and "Performance Graph" of the Company's proxy statement for the Annual Meeting of Stockholders to be held on June 13, 2000.

Information with respect to the Security Ownership of Certain Beneficial Owners and Management is incorporated herein by reference to the section entitled "Security Ownership of Certain Beneficial Owners and Management" of the Company's proxy statement for the Annual Meeting of Stockholders to be held on June 13, 2000.

Information with respect to Certain Relationships and Related Transactions is incorporated herein by reference to the sections entitled "Election of Directors" and "Compensation of Directors" of the Company's proxy statement for the Annual Meeting of Stockholders to be held on June 13, 2000.

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Number

20

21

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(c) Exhibits: See (a)(3) above for a listing of the exhibits included

as part of this report.

(d) Financial Statement Schedules: See page F-1 for a listing of the

financial statement schedules submitted as part of this report.

(e) The Company agrees to furnish to the Commission upon request a copy

of each agreement with respect to long-term debt where the total

amount of securities authorized thereunder does not exceed 10%

of the total consolidated assets of the Company.

* Management contract or compensatory plan or arrangement required to

be identified pursuant to Item 14(a) of this report.

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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.

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.

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All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

F-1

See notes to consolidated financial statements.

F-2