(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 17, 2002 was approximately $392,831,000.

Number of shares of Common Stock outstanding as of April 17, 2002: 27,709,942.

* * *

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 ending on the Sunday closest to February 1, 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.

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The Company is a leading marketer of apparel and footwear. Its roster of brands includes Van Heusenâ (dress shirts and sportswear), Bassâ /G.H. Bass & Co.â (footwear, apparel and accessories), Geoffrey Beeneâ (dress shirts and sportswear), Izodâ (dress shirts and sportswear), DKNYâ (dress shirts), Arrowâ (dress shirts and sportswear), Kenneth Cole New Yorkâ (dress shirts) and Reaction by Kenneth Coleâ (dress shirts).

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 wholesale and retail products include dress, sport and knit shirts, casual and dress casual shoes and, to a lesser extent, sweaters, furnishings, bottoms, outerwear and leather and canvas accessories. Approximately 24% of the Company's net sales in fiscal 2001 were derived from sales of dress shirts, 26% from sales of footwear and related products and 50% from sales of other apparel goods, primarily branded sportswear. The Company markets its products at the wholesale level through national and regional department store chains and also directly to consumers through its own retail stores, generally located in factory outlet retail malls. The Company also presently markets Bass/G.H. Bass & Co. brand footwear, selected Izod brand sportswear and Van Heusen brand pilot shirts through the Internet on a limited basis. The Company believes that marketing through the wholesale channel is where the Company is able to build brand equity and is its core business, and it views its retail businesses as a complement to its strong branded positions in the wholesale market. Revenues from the Company's products occur principally in the United States.

The Company owns the Van Heusen, Bass/G.H. Bass & Co. and Izod brand trademarks. The Geoffrey Beene brand is licensed for dress shirts, men's sportswear and men's and women's apparel stores under agreements with Geoffrey Beene, Inc.; the Arrow brand is licensed for men's and boys' dress shirts and sportswear under an agreement with Cluett American Corp.; the DKNY brand is licensed for dress shirts under an agreement with Donna Karan Studio; and the Kenneth Cole brands are licensed for dress shirts under an agreement with K.C.P.L., Inc.

The Company's principal brands enjoy national recognition. In the United States, Van Heusen is the best-selling dress shirt brand and men's woven sport shirt brand, 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/G.H. Bass & Co. 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 Clubâ brand, which the Company owns and licenses to Oxford Industries Inc., is a leading golf apparel brand in pro shops and at resorts.

The Company markets its brands at different price points to various segments of the market, which spreads its appeal to multiple demographic sectors and a broad spectrum of consumers. This diversity of the Company's brands is intended to minimize competition among the brands and minimize reliance on any one sector. The Company's products are designed to appeal to

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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.

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 2001, the Company operated 719 stores. The stores are operated in four brand formats -- Van Heusen, Bass, Izod and Geoffrey Beene. Van Heusen and Bass, which appeal to the broader range of consumer, are in the broadest range of malls. Izod and Geoffrey Beene stores are located in malls in geographic areas where those brands have greater appeal. 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 G.H. Bass & Co., 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 business is divided into two segments - (i) Apparel and (ii) Footwear and Related Products. The Apparel segment is operated in two groups - Dress Shirts and Sportswear. See "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Segment Data" in the Notes to Consolidated Financial Statements included in "Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K" for information regarding the revenues, profits and total assets attributable to these two segments.

The Company's dress shirts currently are marketed principally under the Van Heusen, Geoffrey Beene, DKNY, Arrow, Izod, Kenneth Cole New York and Reaction by Kenneth Cole brands. The Van Heusen and Geoffrey Beene brands are the leaders in men's dress shirts in their respective categories, with a combined 2001 unit share in the key United States department store sector of 33%. In addition, the Company markets its dress shirts under the Etienne Aignerâ and FUBUâ brands and through private label programs.

Van Heusen brand dress shirts have provided a strong foundation for the Company for most of its history and constitutes 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 department stores.

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The Company began marketing Izod brand dress shirts in the third quarter of 2001. Like Izod brand sportswear, Izod dress shirts are marketed in the moderate to upper moderate price range in department stores. The Company believes that the success of Izod sportswear supports its presence in the department stores' dress shirt offerings and presents an opportunity for further development.

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 (subject to the satisfaction of certain criteria), 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 department and specialty stores.

The Company markets DKNY brand dress shirts under a license agreement that expires in December 2002. The Company is currently negotiating the renewal of this license agreement and there can be no assurances that the DKNY license agreement will be renewed. The failure to renew the license could adversely affect the Company's revenues. DKNY brand dress shirts are sold in the better price range to department and specialty stores. Arrow brand dress shirts are marketed under a license agreement that expires in 2007 and which may be extended, at the Company's option, through 2017. They are sold in the moderate price range to value department and chain stores. The two Kenneth Cole brands of dress shirts, Kenneth Cole New York and Kenneth Cole Reaction, are marketed under a license agreement that expires in 2005. These shirts are sold in the better price range to department and specialty stores.

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. These programs present an opportunity for the Company to leverage its strong design and sourcing expertise. The Company's 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 product exclusivity. Private label products, however, generally 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 private label dress shirts to major national retail chains and department stores.

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

Van Heusen is the best-selling men's woven sport shirt brand in the United States. Van Heusen sportswear also includes knit sport shirts and sweaters. Like Van Heusen brand dress shirts, Van Heusen brand sport shirts and sweaters are marketed at wholesale in the moderate price range to department stores.

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 at principally moderate

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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 for all seasons. Izod brand apparel products consist of active inspired men's sportswear, including sweaters, knitwear, slacks, fleecewear and microfiber jackets. Izod products are marketed in the moderate to upper moderate price range in department stores.

The Company's Izod stores offer men's and women's active sportswear. The product assortments cater to an active lifestyle that revolves around the game of golf. In addition, the Company's Izod stores market easy care sportswear for travel, resort inspired casual sportswear and outerwear. All products are marketed in the moderate to upper moderate price category.

Geoffrey Beene brand men's 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 stores, 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. The women's product mix is also 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 December 2002 and is renewable, at the Company's option (subject to the satisfaction of certain criteria), through 2011. It is the Company's intention to renew this license in 2002. However, there can be no assurances that this will be the case. The failure to renew the license would adversely affect the Company's revenues and profits.

Arrow brand sportswear is marketed at wholesale under the same license agreement as Arrow dress shirts. Products are marketed in the moderate price range to value department and chain stores. Arrow brand apparel products that the Company markets consist of men's knit and woven tops, sweaters and bottoms.

The Company's extensive resources in both product development and sourcing have permitted it to market successfully private label sport shirts to major national retail chains and department stores. The Company also markets private label sport shirts to companies in service industries, including major airlines and food chains.

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

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The Company markets its footwear products at wholesale to department stores and specialty shoe stores. In addition, the Company also markets Bass/G.H. Bass & Co. footwear internationally to retailers in Europe, Canada, South America, the Middle East, Africa and Asia.

The Company's Bass stores typically carry a modified assortment of Bass/G.H. Bass & Co. footwear from its wholesale line, as well as styles not available in the wholesale line, in the moderate price range. The stores also carry apparel and accessories for men and women and other complementary products.

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 brand apparel competitors include Polo/Ralph Lauren, Tommy Hilfiger, Nautica, Perry Ellis and Chaps. In addition, the Company faces significant competition from retailers, including its own wholesale customers, through their private label programs.

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, the Bass/G.H. Bass & Co. brand 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/G.H. Bass & Co. The Company's primary competitors include Dockers, Timberland, Rockport and Sperry.

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 and merchandisers for each of its brands, creating a structure that focuses on the brand's special qualities and identity. These designers and merchandisers 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 who focus on the manufacturing and sourcing needs of its brands. In addition, the Company operates a worldwide network of foreign offices and buying agents for purposes of providing technical support and quality control to those sourcing specialists.

The process from initial design to finished product varies greatly, but generally spans seven to ten 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 two to six months prior to production and quantities are finalized at that time. In addition, sales are monitored regularly at both

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the retail and wholesale levels and modifications in production can be made both to increase or reduce inventories.

A portion of the Company's dress shirts is manufactured in the Company's domestic apparel manufacturing facility in Alabama. However, most of the Company's dress shirts and all of its sportswear are sourced and manufactured to the Company's specifications by independent manufacturers in the Far East, Middle East, Caribbean and Asia who meet its quality, cost and human rights requirements. Footwear is sourced and manufactured to the Company's specifications by independent manufacturers who meet the Company's quality, cost and human rights requirements, principally located in the Far East, Italy and Brazil.

The Company's foreign offices and buying agents 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. 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. 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 its brands 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.

With respect to the Company's retail operations, 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.

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The Company has the exclusive worldwide right to use the Van Heusen, G.H. Bass & Co. and Izod names. In addition, the Company owns the Izod Club name. 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 multiple and varied licensing agreements under which it licenses the use of its brand names. The Company licenses the Van Heusen name for dress shirts and sportswear throughout the world, excluding the United States. The Company also licenses the use of the Van Heusen name around the world for various products, including boy's apparel, pants, sleepwear, eyewear, neckwear, belts, hosiery, outerwear, suits, men's jewelry, small leather goods and 'big and tall' sportswear. The Company licenses the use of the Izod name for neckwear, tailored clothing, belts, boy's sportswear and sleepwear, 'big and tall' sportswear, men's and women's hosiery, eyewear, sleepwear, linens and towels in the United States, and for men's and women's sportswear in Canada and Australia. The Company licenses the use of the Izod Club name for men's and women's golf apparel in the United States, Canada and Europe, and the G.H. Bass & Co. name for eyewear in the United States. In addition, the Company sublicenses the Arrow name for boyswear.

The Company plans to continue expanding its worldwide marketing efforts, utilizing licensing and other strategic partnerships for all its brands. 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 controls 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.

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 imported products are eligible for certain duty-advantaged programs commonly known as NAFTA, AGOA, CBTPA and CBI. 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. Moreover, with the gradual elimination over the next few years of textile and

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apparel quotas resulting from the United State's membership in the World Trade Organization, quota restrictions will no longer affect the Company's business.

As of February 3, 2002, the Company employed approximately 5,200 persons on a full-time basis and approximately 3,600 persons on a part- time basis. Approximately 4% of the Company's 8,800 employees are represented for the purpose of collective bargaining by four different unions. Additional persons, some represented by these four 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.

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 30 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 30 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.

Ms. Diane M. Sullivan joined the Company as Vice Chairman in September 2001. From 1999 until 2001, Ms. Sullivan was President and Chief Operating Officer, as well as a Director, of The Stride Rite Corporation, a footwear company. From 1997 until 1999, she was a Group President with The Stride Rite Corporation.

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Mr. Francis K. Duane was named Vice Chairman of the Company in February, 2001 after serving as President of the Company's Izod division since May 1998. From 1996 until 1998, Mr. Duane was President, Worldwide Sales, of Guess Inc., an apparel company.

Each of the Company's executive officers holds the office indicated until his or her successor is chosen and qualified at the regular meeting of the Board of Directors held immediately following the Annual Meeting of Stockholders.

The Company maintains its principal executive offices at 200 Madison Avenue, New York, New York, occupying approximately 138,000 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, 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.

10

The Company is a party to certain litigation which, in management's judgment based in part on the opinions of legal counsel, 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 in the Notes to Consolidated Financial Statements under the headings "Other Comments" on page F-18, "Selected Quarterly Financial Data" on page F-19 and "Ten Year Financial Summary" on pages F-21 and F-22. As of April 17, 2002, there were 1,160 stockholders of record of the Company's common stock. The closing price of the Company's common stock on April 17, 2002 was $15.06.

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

Reflecting on the past year, one can view 2001 as two distinct time periods. During the first half of 2001, the Company continued the growth momentum it carried into the year and further solidified its position in dress shirts, sportswear and footwear. Sales and earnings during this period grew 10% and 84%, respectively, with sportswear gaining market share, led by Izod and Van Heusen, and Bass continuing its strong financial turnaround.

Circumstances changed drastically after the tragic events of September 11 and this, in addition to its personal toll, had a major negative impact on the Company's business in the second half of the year. Despite this turn of events, which significantly impacted sales and earnings versus the Company's initial expectations, the Company ended the year with very clean inventories, positive cash flow of $23 million and maintained or grew its market share position in dress shirts, sportswear and footwear.

In the fourth quarter of 2001, in response to the changing economic climate and the gradual elimination over the next few years of import quotas on apparel, the Company recorded a $21.0 million charge which included $15.6 million to make certain staff reductions and exit three Central American dress shirt manufacturing facilities and $5.4 million to liquidate certain related dress shirt inventories. The Company believes that these actions will yield greater efficiency and flexibility in sourcing and, in 2002, will benefit the Company with decreased expense levels and, beginning in the second half of the year, with lower cost of goods.

In the Apparel segment, despite a very weak dress shirt environment, the Company increased its share of sales in department stores. The wholesale sportswear businesses achieved double digit growth in sales as Izod and Van Heusen increased penetration and broadened product presentation, and Arrow improved its position within Kohl's and Sears.

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In the Footwear and Related Products segment, a major highlight was the continuation of the financial turnaround begun in the fourth quarter of 2000, as significant gross margin improvement was driven by greatly reduced promotional selling.

The Company believes that its strategy of providing a broad spectrum of consumers with nationally recognized branded dress shirts, sportswear and footwear that embody appropriate fashion at a great value is never more relevant as it is in these uncertain times. The Company's products are solidly placed in their respective market segments across broad and diversified channels of distribution. The Company believes that it continues to be well-positioned to grow its existing brands as well as to add new brands to its existing infrastructure, giving it significant opportunity to enhance future financial performance.

The Company manages and analyzes its operating results by its two vertically integrated business segments: (i) Apparel and (ii) Footwear and Related Products. Of the $21.0 million charge for restructuring and other costs mentioned above, $19.0 million related to the Apparel segment and $2.0 million to the Footwear and Related Products segment.

Net sales of the Apparel segment were $1,061.4 million in 2001 against $1,071.0 million in 2000 and $885.8 million in 1999. Excluding the 53^rd week in 2000, apparel sales were up 1% this year. Sales in 2001 were impacted by a very weak dress shirt environment offset by strength in sportswear, especially Izod and Van Heusen. The increase in 2000 versus 1999 was due to the strong performance of the Company's then existing sportswear and dress shirt brands and the additional volume associated with the July 2000 acquisition of the Arrow and Kenneth Cole licenses.

Gross margin was 33.2% in 2001 compared with 32.8% in 2000 and 34.2% in 1999. The gross margin in 2001 excludes the previously mentioned $5.4 million charge relating to restructuring and other costs. The gross margin percent increased in 2001 as aggressive inventory management positioned the Company to manage through the weak sales trends at both wholesale and in its retail stores. In comparison, the decrease in gross margin percent in 2000 versus 1999 resulted from a significant shift in the sales mix driven by the more rapid growth in the Company's wholesale businesses, which carry lower gross margins, than its retail businesses. Selling, general and administrative expenses, before restructuring and other charges of $13.6 million, was 27.2% as a percentage of sales in 2001 compared with 25.8% in 2000 and 27.9% in 1999. The increase versus 2000 reflects the lack of sales leverage in 2001.

Operating income of the Apparel segment was $64.0 million in 2001 before restructuring and other charges of $19.0 million, or $45.0 million after these charges. This compares with $74.9 million in 2000 and $55.6 million in 1999. The decline in 2001 reflects, in addition to the restructuring charge, the impact of the lack of sales growth and the inability to leverage expenses. In 2000, all of the Company's divisions experienced operating income margin improvements, as the operating income margin of the Apparel segment improved to 7.0% in 2000 from 6.3% in 1999. The operating income margin before restructuring and other charges declined to 6.0% in 2001.

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Net sales of the Footwear and Related Products segment were $370.5 million in 2001 versus $384.5 million in 2000 and $385.7 million in 1999. The 2001 sales decline was principally attributable to the second half of the year, as the soft retail environment was exacerbated by the events of September 11. Sales in 2000, down for most of that year, had begun to recover in the fourth quarter, which also included an additional week of sales.

Gross margin continued to be a highlight and reached 42.9% in 2001, up from 39.2% in 2000 and 38.0% in 1999. This represents an almost 500 basis point improvement over this three year period. In 2001, the improvement was driven by the significantly reduced level of promotional selling. The improvement in gross margin in 2000 is directly attributable to the closure of Bass' two manufacturing facilities in 1999, which enabled the Company to source footwear product more effectively. In 2001, selling, general and administrative expenses as a percentage of sales increased to 37.1% before $2.0 million of restructuring and other charges. This compares with 34.6% and 33.2% in 2000 and 1999, respectively. The increase in all years is driven by the absence of sales growth and the resulting inability to leverage expenses.

Operating income of the Footwear and Related Products segment increased 21% to $21.5 million before restructuring and other charges, or to $19.5 million after such charges. Overall operating margins increased to 5.8% in 2001 before restructuring and other charges, compared with 4.6% and 4.8% in 2000 and 1999, respectively.

Corporate expenses were $23.4 million in 2001, $22.2 million in 2000 and $26.0 million in 1999. The decreased expense level in 2000 was due to the absence of Year 2000 computer conversion costs that were incurred in 1999.

Net interest expense in 2001 was $24.5 million compared with $22.3 million in 2000 and $22.4 million in 1999. The increase in 2001 reflects funding the acquisition of the Arrow and Kenneth Cole licenses in mid-2000, as well as the year end acquisition of the Van Heusen trademark in the parts of the world where the Company did not previously own the trademark. Interest expense was relatively flat in 2000 versus 1999 as the benefit of the positive cash flow from operations in 2000 offset the use of cash for the acquisition of the net assets associated with the Arrow and Kenneth Cole licenses at the end of the second quarter.

The income tax expense rate was 36.0% in 2001 compared with 37.6% in 2000 and 34.8% in 1999. The tax rate in 2001 reflects tax saving strategies implemented by the Company at the end of 2000. The increase in 2000 resulted principally from closing Bass' manufacturing operations in Puerto Rico in the third quarter of 1999, which resulted in a higher percentage of pre-tax income being subject to U.S. tax. The full year impact of this closing on the effective tax rate was reflected in 2000 while 1999 had only a partial year effect.

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Cash provided by operating activities was $63.7 million in 2001 compared with $35.4 million in 2000 and $74.0 million in 1999. The higher level of cash from operations in 2001 was primarily the result of the Company's aggressive management of working capital, notably inventory. The higher level in 1999 came from the liquidation of working capital associated with the Company's exiting of its Gant and Izod Club businesses. The Company anticipates cash flow from operations to approximate $50 to $55 million in 2002 as the expected increase in earnings is planned to be offset by a build in working capital, principally higher receivables related to the anticipated increase in fourth quarter sales. The foregoing is a forward-looking statement. Factors that could affect the Company's ability to attain this cash flow forecast include the failure to attain projected sales levels, to collect receivables as projected, variations in projected inventory levels and increased costs.

Capital spending in 2001 was $33.4 million compared with $31.9 million in 2000 and $31.3 million in 1999. The Company anticipates capital spending in 2002 to approximate $32 to $34 million, which it expects to fund from operating cash flow. The foregoing is a forward- looking statement. Changes in the Company's plans or projections regarding store refurbishment and logistics infrastructure investment, as well as a change in cash flow could affect actual capital spending levels.

Total debt as a percentage of total capital was 48.4% at the end of 2001 compared with 48.1% and 50.7% at the end of 2000 and 1999, respectively. The Company believes that its ability to generate positive cash flow, combined with its borrowing capacity under its revolving credit agreement, provides sufficient liquidity for potential investment opportunities that may arise. The foregoing is a forward-looking statement and may be affected by factors such as changes in cash flow or the size of any acquisition the Company may undertake. The Company does not currently have any understanding regarding any acquisition.

The Company's Credit Facility expires in April 2003. The Company believes it will be able to resyndicate this facility prior to year- end 2002. However, given current market conditions, borrowing spreads are likely to be 100 to 150 basis points higher than borrowing spreads under the existing Credit Facility. The foregoing are forward-looking statements. The Company's ability to enter into a new credit facility and the pricing thereof will be affected by factors such as the Company's financial condition and conditions in the lending market.

Financial instruments held by the Company include cash equivalents and long-term debt. Based on the amount of cash equivalents held by the Company at February 3, 2002 and the average net amount of cash equivalents which the Company anticipates holding during 2002, it 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.

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The Company's business is seasonal, with higher sales and income in the second half of the year, which coincides 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 less profitable Spring selling season at wholesale combines with retail seasonality to make the first quarter weaker than the other quarters.

The Company's financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. The Company believes that the following are among the more critical judgment areas in the application of its accounting policies that currently affect its financial condition and results of operations:

Sales allowance accrual - The Company has arrangements with many of its department and specialty store customers to support those customers' sales of the Company's products. The Company establishes accruals which, based on a review of the individual customer arrangements and the expected performance of the Company's products in those customers' stores, it believes will be required to satisfy its obligations with its customers. It is possible that the Company's estimates could vary from actual results, which would require the Company to adjust the allowance accruals.

Inventories - The Company states its inventories at the lower of cost or market. When market conditions indicate that inventories may need to be sold below cost, the Company writes down its inventories to the estimated net realizable value. The Company believes that all inventory writedowns required at February 3, 2002 have been recorded. If market conditions were to change, it is possible that the required level of inventory reserves would need to be adjusted.

Income taxes - As of February 3, 2002, the Company has deferred tax assets totaling $49 million, of which $33 million relates to tax loss and credit carryforwards which begin to expire principally in 2010. Realization of these carryforwards is primarily dependent upon the Company's achievement of future taxable income. Based on the extended expiration dates and projections of future taxable income, the Company has determined that realization of these assets is more likely than not. If future changes to market conditions require the Company to change its judgment as to realization, it is possible that material adjustments to the deferred tax asset may be required.

Goodwill and other intangible assets - As discussed under the heading "Accounting Pronouncement" in the Notes to Consolidated Financial Statements, in 2002 the Company is adopting FASB Statement No. 142. This statement requires, among other things, that goodwill and other indefinitely lived intangible assets no longer be amortized, and instead be tested for impairment based on fair value. An impairment loss could have a material adverse impact

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on the Company's financial condition and results of operations. Performance of the goodwill impairment tests will require significant judgments regarding the allocation of net assets to the reporting unit level, which is the level at which the impairment tests are required. The determination of whether an impairment exists will also depend on, among other factors, the estimated fair value of the reporting units, which itself will depend in part on market conditions, including the price of the Company's common stock.

Investment in Gant AB - As of February 3, 2002, other noncurrent assets include $13 million as an equity investment in Gant AB, which owns the Gant trademark. The Company evaluates annually whether the carrying amount of this investment is impaired based on the estimated fair market value of Gant AB.

Medical claims accrual - The Company self-insures a significant portion of its employee medical costs. Based on trends and number of covered employees, the Company records estimates of medical claims which have been incurred but not paid. If actual medical claims varied significantly from these estimates, an adjustment to the medical claims accrual would be required.

Pension benefits - Included in the calculations of expense and liability for the Company's pension plans are various assumptions, including return on assets, discount rate and future compensation increases. Based on these assumptions, and due in large part to poor performance of U.S. equity markets in the past two years, the Company has certain unrecognized costs for its pension plans at February 3, 2002. Depending on future asset performance and discount rates, the Company could be required to amortize these costs in the future which could have a material effect on future pension expense.

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

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

None.

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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 11, 2002. Information with regard to compliance by the Company's officers and directors with section 16(a) of the Securities Exchange Act of 1934, as amended is incorporated herein by reference to the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's proxy statement for the Annual Meeting of Stockholders to be held on June 11, 2002. Information with regard to the Company's executive officers is contained in the section entitled "Executive Officers of the Registrant" in Item 1, Part I of this report.

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 11, 2002.

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 11, 2002.

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 11, 2002.

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Number

19

20

21

+ Filed herewith.

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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