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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended June 30, 1995

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to


Commission File No. 1-5863

JACLYN, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 22-1432053
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

635 59th Street, West New York, New Jersey 07093
- ------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (201) 868-9400

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

Name of each exchange
Title of Class on which registered
-------------------------- -----------------------
Common Stock, $1 par value American Stock Exchange

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

Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [ ]

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

The aggregate market value of the voting stock (based on the closing price of
such stock on the American Stock Exchange) held by non-affiliates of the
Registrant at September 6, 1995 was approximately $7,609,502.

There were 2,691,405 shares of Common Stock outstanding at September 6, 1995.

DOCUMENTS INCORPORATED BY REFERENCE

PART III Certain Portions of the Registrant's Proxy Statement for the
Registrant's Annual Meeting of Stockholders scheduled to be held on
December 5, 1995.


TABLE OF CONTENTS

Item Page
---- ----
PART I 1. Business............................................ 1

2. Properties.......................................... 4

3. Legal Proceedings................................... 4

4. Submission of Matters to a
Vote of Security Holders.......................... 4

PART II 5. Market for the Registrant's Common Equity
and Related Stockholder Matters................... 5

6. Selected Financial Data............................. 6

7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................................ 7

8. Financial Statements and Supplementary
Data.............................................. 10

9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure........................................ 10

PART III 10. Directors and Executive Officers
of the Registrant................................. 10

11. Executive Compensation.............................. 10

12. Security Ownership of Certain
Beneficial Owners and Management.................. 10

13. Certain Relationships and Related
Transactions...................................... 10

PART IV 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K................. 11

SIGNATURES............................................................... 15




PART I

Item 1. Business.

Jaclyn, Inc. (incorporated in the State of Delaware in 1968) ("Jaclyn") and
its subsidiaries (collectively the "Registrant") are primarily engaged in the
design, manufacture, distribution and sale of vinyl, leather and fabric handbags
and related products (collectively, "handbag products"), and apparel items. The
Registrant markets its handbag products in a variety of popularly priced
fashions and designs, with an emphasis on casual, travel and sport styles. The
Registrant's apparel lines are wide ranging and include vests, loungewear,
sleepwear, dresses, sportswear and slippers, as well as lingerie.

Recent Developments. During the fiscal year ended June 30, 1995, the
Registrant announced that due to the decline in sales of the Registrant's
Barney(R) the dinosaur line of products and the increased direct importation of
products by its customers, it was restructuring certain of its operations. The
restructuring included personnel reductions, the closing of the Registrant's
warehouse in North Bergen, New Jersey and the consolidation of its New York City
showrooms. The Registrant also discontinued the payment of quarterly cash
dividends after the second quarter of the fiscal year. During fiscal 1995, the
Registrant recorded a pre-tax restructuring charge of approximately $995,000,
representing employee severance and other exit costs in connection with the
closure of the warehouse and showroom. In addition, the Registrant incurred
costs of $1,761,000, primarily the write-down to market value of inventory of
certain of its divisions and costs incurred during the wind-down of operations
in its closed facilities. The Registrant does not expect to incur additional
restructuring related expenses during the fiscal year ending June 30, 1996.
Reference is made to "Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 7 through 10 of this
Form 10-K and Note P, "Corporate Restructuring" of the Notes to Consolidated
Financial Statements on page F-13 of this Form 10-K for additional information
about the restructuring.

General. Styling is an important factor in the merchandising of all of the
Registrant's products. The Registrant's staff of full-time designers studies
fashion trends in order to anticipate consumer demand. The design staff works
closely with the purchasing department to determine the styling and materials
components for its handbag products, and concepts and fabrics for its apparel
products, that may be available and also works with the production and
engineering staffs to determine the costs of production and the technical
problems involved in producing a new style. The Registrant changes many of its
designs from season to season.

Finished merchandise is received at the Registrant's warehouses located in
Ferris, Texas and West New York, New Jersey and in several independently owned
warehouses in New Jersey, California and Texas, and from these locations is
shipped under different selling names to customers all over the country. The
Registrant's handbag products are intended to retail at between $5 and $225. The
Registrant's better price and designer lines of handbag products, which are sold
under the "Susan Gail" and "Ellen Tracy(TM)" names, are marketed through better
department stores and specialty shops. The Registrant's other handbag products
are marketed primarily through general merchandise, chain and department stores.
In addition, the Registrant markets its apparel lines to existing customers of
its




handbag products as premium and/or special order items, as well as to major mail
order catalog chains and other retailers.

The Registrant markets its handbag products under trademarks and tradenames
which it owns, including "Shane," "Empress," "Aetna," "Susan Gail," "Robyn Lyn"
and "Marilyn USA." In addition, the Registrant is licensed to manufacture and
market handbag products under the names "Barney(R)" and "Baby Bop(R)" under an
agreement which expires on June 30, 1996, the name "Ellen Tracy(TM)" under an
agreement which expires on February 29, 1996 and the name "Crayola(R)" under an
agreement which expires on December 31, 1995. Stone Mountain Handbag Co., an
independent sales representative, markets handbag products manufactured for it
by the Registrant under the name "Saddle River." The Registrant's apparel lines
are marketed under the names "Robyn Lyn," "Saddle River," "On Tour" and "111
Main." The Registrant also manufactures apparel items for sale as private-label
merchandise. The Registrant considers all of its trademarks, tradenames and
other intellectual property rights to be of significant value in the marketing
of its products.

The Registrant sells throughout the United States through its own salesmen
and through independent sales representatives. Sales of domestically
manufactured merchandise, including those assembled in Mexico from domestically
produced components, accounted for approximately 40% of the Registrant's
consolidated net sales for the fiscal year ended June 30, 1995. During fiscal
1994, sales of such merchandise, including those assembled in Mexico from
domestically manufactured components, accounted for approximately 23% of
consolidated net sales.

In fiscal 1995, the Registrant's imports of merchandise manufactured in the
Far East accounted for approximately 60% of consolidated net sales, compared to
approximately 77% of consolidated net sales in fiscal 1994. Such imports offer
the Registrant the benefit of a greater diversification of styling resulting
from volume purchases and the benefit of cost savings related to such purchases.
In addition, the market's increased acceptance of leather handbags and related
products has resulted in an emphasis on Far East manufacturing and supply
sources. During fiscal 1995, the Registrant imported certain of its better and
designer lines of handbag products from Europe. However, such imports accounted
for less than 1% of the Registrant's consolidated net sales for the fiscal year
ended June 30, 1995. While the Registrant's operations are subject to the usual
risks associated with purchases from foreign countries, the Registrant's other
foreign manufacturing sources and its domestic manufacturing operations provide
it with alternative sources and facilities.

Approximately 80% of the Registrant's consolidated net sales for fiscal
1995 were to general merchandise, chain and department stores, with the balance
consisting of sales to specialty shops, smaller retail stores and cosmetic
firms. During the fiscal year ended June 30, 1995, four customers of the
Registrant accounted for 44% of the Registrant's consolidated net sales, of
which the Registrant's three largest customers (Avon Products, Inc., Wal-Mart
Stores, Inc. and Estee Lauder) accounted for 15%, 13% and 8% of such sales,
respectively. Four major customers of the Registrant accounted for approximately
34% of the Registrant's consolidated net sales for the fiscal year ended June
30, 1994, of which the Registrant's two largest customers (Wal-Mart Stores, Inc.
and Avon Products, Inc.) accounted for 18% and 6% of such sales, respectively.
Sales of apparel items during each of the fiscal years ended June 30, 1995, 1994
and 1993 represented 30%, 13% and 5%, respectively, of consolidated net sales.
Sales of handbag products represented the remainder of the Registrant's
consolidated net sales. The Registrant's

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sales are customarily offered on credit terms. The Registrant does not have
long-term contracts with any of its customers.

The Registrant purchases its handbag and apparel raw materials, primarily
fabrics, vinyl and urethane plastics, leather, frames, ornaments, trim and other
materials, and certain of its finished products, from a variety of sources. In
most cases, the Registrant assists its suppliers and contractors in the design
and style of the materials it purchases. The Registrant's largest expenditures
for raw materials are for fabrics, leather, vinyl and urethane plastics, which
the Registrant purchases from several suppliers, one of which provided about 2%
of its raw material needs in fiscal 1995. While the Registrant has no long-term
supply contracts, the raw materials it uses are available from various sources
and it anticipates no difficulty in the future in obtaining the necessary raw
materials for its operations. With respect to its domestic manufacturing and
imported purchases from the Far East and Europe of finished handbags and related
products, the Registrant deals with a number of sources, both domestically and
in the Far East and Europe, no one of which accounted for more than 11% of the
Registrant's total cost of goods sold. The Registrant has no long-term supply
contracts with its Far East or European sources of finished handbags and related
products or apparel items and is subject to the usual risks associated
therewith.

The Registrant generally offers Fall/Winter, Holiday and Spring/Summer
product lines. The Registrant's business is somewhat seasonal in nature, with
shipments being greater in the first and third quarters of its fiscal years and
lower in the second and fourth quarters. Reference is made to Note R, "Unaudited
Quarterly Financial Data," of the Notes to Consolidated Financial Statements on
page F-14 of this Form 10-K for additional information about quarterly results.

At September 15, 1995, the Registrant had unfilled orders of approximately
$18,200,000, compared to approximately $23,200,000 at September 15, 1994. The
decrease in backlog is attributable, among other things, to a planned decrease
in sales volume as part of the Registrant's restructuring and to timing
differences in the receipt of orders from certain customers in 1995 compared to
1994. In the ordinary course of business, the amount of unfilled orders at a
particular point in time is affected by several factors, including scheduling of
the manufacture and shipping of goods (which, in turn, may be dependent on the
requirements of customers). Accordingly, a comparison of backlog from period to
period is not necessarily meaningful and may not be indicative of future sales
patterns or shipments.

The Registrant employed approximately 284 persons as of June 30, 1995, of
whom 81 were on a salaried basis and the balance on an hourly basis. At June 30,
1995, 32 of the Registrant's employees were members of the Four Joint Boards of
New York, New Jersey, Pennsylvania and New England, affiliated with the
International Leather Goods, Plastics and Novelty Workers Union, AFL-CIO. The
Registrant considers its relations with its employees to be satisfactory.

The Registrant competes with hundreds of domestic and foreign manufacturers
of popular priced handbags, very few of which are believed to account for as
much as 1% of industry sales. In addition, the Registrant competes with numerous
manufacturers of apparel items. The Registrant believes its sales of apparel
items are not significant in light of total apparel industry sales. The
Registrant's business is dependent, among other things, on its ability to
anticipate and respond to changing consumer preferences, to remain competitive
in price, style and quality and to meet its customers'

-3-



production and delivery requirements. While some of the Registrant's
competitors may be larger or may have greater resources than the Registrant, the
Registrant believes that its size and financial position will allow it to
continue to respond to changes in consumer demand and meet its competition.

Item 2. Properties.

The Registrant's executive offices and one of its warehouse facilities,
containing 140,000 square feet, are located in West New York, New Jersey. The
Registrant occupied these facilities under long-term leases from 1968 to 1981,
when these facilities were purchased by the Registrant. The Registrant currently
leases to outside parties approximately 40,000 square feet of the West New York
facilities. The Registrant also leases (i) a distribution and warehouse facility
in North Bergen, New Jersey, containing approximately 58,000 square feet (which
facility's lease expires in June 1996 and, as part of the Registrant's
restructuring, will not be renewed), (ii) showroom, warehouse and distribution
facilities in New York City containing approximately 12,000 square feet, and
(iii) two additional showroom and office facilities in New York City totaling
approximately 7,000 square feet (one of which is subject to a lease that expires
in January 1997 and, as part of the Registrant's restructuring, will not be
renewed). The executive offices, and manufacturing, distribution and warehouse
facilities, of JLN, Inc., containing approximately 93,250 square feet, are
located in Ferris, Texas. All of the Registrant's facilities are well maintained
structures, in good physical condition and are adequate to meet its current and
reasonably foreseeable needs.

Reference is made to Note E, "Leases and Commitments," of the Notes to
Consolidated Financial Statements on page F-8 of this Form 10-K for additional
information about the Registrant's commitments under the terms of non-cancelable
leases.

Item 3. Legal Proceedings.

a) The Registrant is not a party to, nor is any of its property the
subject of, any material pending legal proceeding.

b) No material pending legal proceeding was terminated during the
three-months ended June 30, 1995.

Item 4. Submission of Matters to a Vote of Security Holders.

The Registrant did not submit any matters to a vote of its security
holders, through the solicitation of proxies or otherwise, during the
three-months ended June 30, 1995.

-4-




PART II

Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters.

The Registrant's Common Stock, $1.00 par value per share, is traded on the
American Stock Exchange (Symbol: "JLN"). The following table sets forth the high
and low closing sales prices for the Registrant's Common Stock, as reported by
the American Stock Exchange, for each quarterly period during the Registrant's
fiscal years ended June 30, 1995 and June 30, 1994:

Fiscal Year Ended June 30, 1995 High Low
- ------------------------------- ---- ---

First Quarter .................................... 13 1/4 10 1/8
Second Quarter ................................... 10 1/8 4 3/8
Third Quarter .................................... 6 3 1/2
Fourth Quarter ................................... 6 3 7/8

Fiscal Year Ended June 30, 1994 .................. High Low
- -------------------------------------------------- ----\ ---

First Quarter .................................... 11 5/8 9 3/8
Second Quarter ................................... 13 1/2 9 3/4
Third Quarter .................................... 15 1/4 12
Fourth Quarter ................................... 13 1/8 11 1/2


During the quarterly periods in fiscal 1995 ending September 30, 1994 and
December 31, 1994, the Registrant paid quarterly cash dividends of $.125 per
share of its Common Stock. In connection with the restructuring of the
Registrant's operations, described above under the caption "Item 1. Business --
Recent Developments," the Registrant discontinued the payment of quarterly cash
dividends during the third quarter ended March 31, 1995. As previously
announced, the Registrant does not anticipate a resumption of payment of cash
dividends in the foreseeable future. During each quarterly period during the
Registrant's fiscal year ended June 30, 1994, the Registrant declared and paid
dividends of $.125 per share of its Common Stock.

At June 30, 1995, there were approximately 874 holders of record of the
Registrant's Common Stock.


-5-



Item 6. Selected Financial Data.



JACLYN, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA


Years ended June 30,
------------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------

REVENUES:
Net Sales ........................................ $ 73,577,000 $ 82,393,000 $ 63,520,000 $ 65,285,000 $ 55,040,000
Other income, net ................................ 317,000 422,000 454,000 623,000 1,028,000
------------ ------------ ------------ ------------ ------------
73,894,000 82,815,000 63,974,000 65,908,000 56,068,000
------------ ------------ ------------ ------------ ------------
Costs of goods sold .............................. 58,639,000 58,298,000 48,044,000 49,411,000 40,318,000
Shipping, selling
and administrative expenses .................... 17,834,000 21,741,000 15,786,000 14,652,000 14,664,000
Interest expense ................................. 309,000 224,000 59,000 26,000 17,000
Restructuring costs .............................. 995,000 -- -- -- --
Cost of product recall ........................... -- -- 2,000,000 -- --
(Benefit) provision for income taxes ............. (1,563,000) 965,000 (786,000) 436,000 228,000
Cumulative effect of change in
accounting for income taxes .................... -- -- (750,000) -- --
------------ ------------ ------------ ------------ ------------
NET (LOSS) EARNINGS ............................. $ (2,320,000) $ 1,587,000 $ (379,000) $ 1,383,000 $ 841,000
============ ============ ============ ============ ============

Average common shares
outstanding ................................... 2,691,352 2,688,555 2,675,815 2,660,537 2,705,399
============ ============ ============ ============ ============
(Loss) earnings per common share
before cumulative effect of change
in accounting for income taxes ................ $ (0.86) $ 0.59 $ (0.42) $ 0.52 $ 0.31
Cumulative effect of change in
accounting for income taxes ................... -- -- 0.28 -- --
------------ ------------ ------------ ------------ ------------
(Loss) earnings per common share ................. $ (0.86) $ 0.59 $ (0.14) $ 0.52 $ 0.31
============ ============ ============ ============ ============
Cash dividends paid .............................. $ 0.25 $ 0.50 $ 0.50 $ 0.50 $ 0.50
============ ============ ============ ============ ============
TOTAL ASSETS ..................................... $ 28,409,000 $ 34,886,000 $ 32,288,000 $ 29,515,000 $ 29,582,000
============ ============ ============ ============ ============
Long term debt:
Guaranteed bank loan--ESOP .................... $ 888,000 $ 1,150,000 -- -- --
Other non-current liabilities .................. $ 33,000 $ 31,000 $ 25,000 $ 44,000 --
Obligations under capital leases ............... -- -- -- $ 217,000 $ 241,000
Stockholders' equity ............................. $ 15,942,000 $ 18,703,000 $ 19,600,000 $ 21,343,000 $ 21,289,000
============ ============ ============ ============ ============
Stockholders' equity per share ................... $ 5.92 $ 6.95 $ 7.30 $ 7.97 $ 8.07
============ ============ ============ ============ ============


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Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.

Liquidity and Capital Resources

The net increase in cash and cash equivalents in the fiscal year ended June
30, 1995 was $58,000 compared to decreases in the fiscal years ended June 30,
1994 and 1993 of $518,000 and $735,000, respectively. The increase in fiscal
1995 was the result of an excess of funds provided by operating activities of
$2,967,000 over funds used in investing activities of $192,000 and financing
activities of $2,717,000. Funds provided by operating activities were mainly the
result of a decrease in accounts receivable of $4,445,000 as a result of lower
sales in the final months of this fiscal period, a decrease in inventories of
$2,277,000 due to increased emphasis on purchasing inventory for certain
divisions by specific order rather than for stock, as well as anticipated lower
demand for goods, and from the sale of marketable trading securities of
$1,662,000. These funds were principally offset by the net loss of $2,320,000,
an increase in both deferred and prepaid and refundable income taxes of
$2,032,000, the purchase of trading securities totaling $620,000 and a decrease
in accounts payable and other current liabilities of $1,012,000, which resulted
from lower inventory levels. Cash used in investing activities was primarily for
the purchase of bonds (securities available for sale) plus additions to property
and equipment. Funds used in financing activities were principally for the
repayment of bank loans of $2,000,000 and dividends paid for the first and
second quarters of the 1995 fiscal year totaling $715,000.

Through a $20,000,000 credit line with its bank, the Company has short-term
borrowing capabilities, and can issue letters of credit for purchase commitments
and issue bankers acceptances. Within this line of credit, the Company has
available to it up to $10,000,000 of short-term loans and bankers acceptances at
either prime or LIBOR rates. All borrowings, with the exception of bankers
acceptances, are unsecured. Amounts outstanding under the unsecured short-term
line of credit and the bankers acceptance line at June 30, 1995 were $2,500,000
and $1,038,000, respectively. Reference is made to Note F "Credit Facilities,"
of the Notes to Consolidated Financial Statements on page F-9 of this Form 10-K
for additional information about the Company's credit lines.

There were no material commitments for capital expenditures at June 30,
1995.

The net decrease in cash and cash equivalents in the fiscal year ended June
30, 1994 was $518,000. The decrease in fiscal 1994 was the result of funds used
in operating activities of $3,063,000 in excess of funds provided by investing
activities of $1,441,000 and financing activities of $1,104,000. Funds used in
operating activities were mainly the result of increases in accounts receivable
of $2,992,000, due to heavy shipments in the last month of the fiscal year, and
increases in inventories of $2,748,000, primarily a buildup for shipments in the
first quarter of the subsequent year. These were principally offset by net
earnings of $1,587,000, depreciation and amortization of $360,000 and a decrease
in deferred and refundable income taxes. Cash provided by investing activities
consisted primarily of a decrease in marketable securities due mainly to
maturing bonds of $1,910,000 offset by the purchase of property and equipment of
$573,000. Funds provided by financing activities, mainly bank loans of
$2,438,000, were offset by dividends paid of $1,350,000.

The net decrease in cash and cash equivalents in fiscal 1993 of $735,000
was the result of funds used in operating activities of $1,720,000 and investing
activities of $751,000 in excess of funds provided by financing activities of
$1,736,000. Funds used in operating activities were mainly the result of the net
loss of $379,000, due primarily to a $2,000,000 charge for the recall of the
Company's Barney(R) line, increases in accounts receivable of $1,844,000, due to
heavy shipments in the final month of the fiscal year, increases in inventories
of $1,513,000, due to a build up of inventory for a large backlog of orders, a
decrease in deferred taxes of $948,000 and the cumulative effect of changes in
accounting for income taxes of $750,000. These were offset, in part, by
increases in accounts payable and other current liabilities of $2,431,000 and
depreciation and amortization of $510,000. Cash used in investing activities
represents, mainly, the purchase of property and equipment, and the purchase by
the Company, on February 11, 1993, of certain assets of Susan Gail Handbags,
Inc. for approximately $400,000. Susan Gail Handbags was an importer of ladies'
handbags under the

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names of "Susan Gail" and "Ellen Tracy(TM)". Funds provided by financing
activities were due mainly to bank loans of $3,100,000, offset primarily by
dividends paid of $1,339,000.

The Company has an Employee Stock Ownership Plan ("ESOP"). During fiscal
1994, the Company guaranteed a bank loan to the ESOP in the amount of
$1,150,000, the proceeds of which were also used to purchase shares of the
Company's Common Stock. At June 30, 1995, the loan balance was $888,000.
Reference is made to Note M, "Employee Stock Ownership Plan and Trust," of the
Notes to Consolidated Financial Statements on page F-13 of this Form 10-K.

As of June 30, 1995, 1994 and 1993, working capital was $16,223,000,
$19,128,000 and $18,772,000, respectively. The ratio of current assets to
current liabilities for those same periods was 2.6 to 1, 2.5 to 1 and 2.7 to 1,
respectively. The changes in the current ratios were primarily due to the level
of bank borrowings, which was $3,538,000 at June 30, 1995, $5,538,000 at June
30, 1994 and $3,100,000 at June 30, 1993. The Company's cash, cash equivalents
and marketable securities totaled $5,191,000, $5,860,000 and $8,288,000 at June
30, 1995, 1994 and 1993, respectively. The Company believes that funds provided
by operations, existing working capital and the Company's current bank lines
will be sufficient to meet its anticipated short-term and long-term working
capital needs.





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Results of Operations

1995 Compared to 1994

During fiscal 1995, the Company decided to institute a restructuring
program as a result of the decline in sales and margins and the increased direct
importation by accessory and apparel retailers. This program resulted in a
pre-tax restructuring charge of $995,000, representing employee severance and
other exit costs in connection with the closure of a warehouse and showroom. In
addition, there were costs of $1,761,000, primarily for the write-down to market
value of inventory of certain divisions of the Company, as well as costs
incurred during the wind-down of operations in those closed facilities.

Net sales were $73,577,000 in the year ended June 30, 1995 compared to
$82,393,000 in the year ended June 30, 1994. The decrease in sales was due
primarily to the steep decline in the Company's childrens line and its ladies
moderately priced handbag lines, offset partially by an increase in apparel
sales.

Cost of goods sold, as a percentage of sales, increased, in part, due to
the markdowns taken by the Company relative to the restructuring and from lower
markups achieved in certain divisions. Shipping, selling and administrative
expenses decreased due to the decrease in expenses related to the decline in
sales volume and measures taken in the restructuring. Interest expense increased
during fiscal 1995 compared to fiscal 1994 due to an increase in interest rates
and a slightly higher weighted average loan balance outstanding in 1995 compared
to 1994.

1994 Compared to 1993

Net sales increased to $82,393,000 in the year ended June 30, 1994 from
$63,520,000 in the year ended June 30, 1993. The increase in sales was due
primarily to the shipment of the large backlog of orders for the Barney(R)
children's line during the early part of the fiscal year. Orders for this line
decreased during the remainder of the year due principally to an over-saturation
of the market. An increase in the manufacture and shipment of apparel items in
the Premium division also contributed to the increase in sales.

Cost of goods sold increased proportionately less than the increase in
sales. This was due in large part to higher markups achieved through the sale of
some of the Company's licensed products. Shipping, selling and administrative
expenses increased due to the increase in expenses related to the increase in
sales volume, although cost cutting measures have been in effect for fixed
expenses. Interest expense increased during fiscal 1994 compared to fiscal 1993
due to the increase in the use of banking facilities to carry larger receivable
and inventory levels.

Other income, almost exclusively from investments, declined due to a
reduction in funds available for investment. The increase in net earnings for
the fiscal year ended June 30, 1994 was due mainly to the increase in sales
volume and somewhat higher markups, offset by increased shipping, selling,
administrative and interest expenses.

Impact of Recently Issued Accounting Standards

In May 1993, the Financial Accounting Standards Boards issued SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." The Company
was required to adopt the provisions of this standard on July 1, 1994. The
impact of adoption of this standard was to increase investments classified as
"Trading Securities," which totaled $1,045,000 at June 30, 1994, by $3,000 and
earnings by $1,800 (net of tax of $1,200). In addition, this standard increased
investments classified as "Available-for-Sale Securities," which totaled
$4,685,000 at June 30, 1994, by $52,000 and Stockholders' Equity by $31,200 (net
of tax of $20,800).

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Item 8. Financial Statements and Supplementary Data.

a) Financial Statements

The report dated September 15, 1995 of Deloitte & Touche LLP, independent
auditors, the consolidated balance sheets of Jaclyn, Inc. and subsidiaries as of
June 30, 1995 and 1994 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended June 30, 1995 and Notes to Consolidated Financial Statements appear on
pages F-7 through F-14 of this Form 10-K.

b) Supplementary Data

Selected unaudited quarterly financial data for the fiscal years ended June
30, 1995 and June 30, 1994 is set forth at Note R, "Unaudited Quarterly
Financial Data" on page F-14 of this Form 10-K.

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.

Not Applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The information required by this item is incorporated herein by reference
to the Registrant's definitive Proxy Statement relating to the Registrant's 1995
Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 11. Executive Compensation.

The information required by this item is incorporated herein by reference
to the Registrant's definitive Proxy Statement relating to the Registrant's 1995
Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is incorporated herein by reference
to the Registrant's definitive Proxy Statement relating to the Registrant's 1995
Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 13. Certain Relationships and Related Transactions.

The information required by this item is incorporated herein by reference
to the Registrant's definitive Proxy Statement relating to the Registrant's 1995
Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

-10-


PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) The following financial statements and financial statement schedules are
filed as part of this report:

(1) Financial Statements:

Independent Auditors' Report

Consolidated Balance Sheets -- June 30, 1995 and 1994

Consolidated Statements of Operations -- years ended June 30, 1995,
1994 and 1993

Consolidated Statements of Stockholders' Equity -- years ended June
30, 1995, 1994 and 1993

Consolidated Statements of Cash Flows -- years ended June 30, 1995,
1994 and 1993

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

Schedule II -- Valuation and Qualifying Accounts

All other schedules are omitted because they are either inapplicable, not
required, or because the required information is included in the consolidated
financial statements or notes thereto.

(3) Exhibits:

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

3(a) Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3(a) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1994).

3(b) By-Laws of the Registrant (incorporated herein by
reference to Exhibit 3(b) to the Registrant's Annual
Report on Form 10-K, File No. 1-5863, for the fiscal
year ended June 30, 1991).

l0(a) Lease dated September 1, 1968 relating to warehouse
facilities of the Registrant located in North Bergen,
New Jersey (incorporated herein by reference to Exhibit
13(c) of Amendment No. 1 to the Registrant's
Registration Statement on Form S-1, Registration
No. 2-29970, filed October 1, 1968).

10(b) Renewal dated March 19, 1986 of Lease dated September
1, 1968 relating to warehouse facilities of the
Registrant located in North Bergen, New Jersey
(incorporated herein by reference to Exhibit 10(c) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1987).

-11-



10(c) Lease dated January 29, 1987 relating to warehouse
facilities of the Registrant located in North Bergen,
New Jersey (incorporated herein by reference to Exhibit
10(e) to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June 30,
1987).

10(d) Lease dated as of February 11, 1993 with 33 East 33rd
Street Realty Associates relating to showroom,
warehouse and distribution facilities of the Registrant
located in New York, New York (incorporated herein by
reference to Exhibit 10(d) to the Registrant's Annual
Report on Form 10-K, File No. 1-5863, for the fiscal
year ended June 30, 1993).

10(e) Lease dated January 28, 1994 with 330 Realty Company
relating to office and showroom facilities located in
New York, New York (incorporated herein by reference to
Exhibit 10(e) to the Registrant's Annual Report on Form
10-K, File No. 1-5863, for the fiscal year ended June
30, 1994).

10(f) Lease dated January 28, 1994 between E.H. Handbag Co.
and 330 Realty Company relating to office and showroom
facilities located in New York, New York (incorporated
herein by reference to Exhibit 10(f) to the
Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1993)

10(g) Incentive Stock Option Plan of the Registrant
(incorporated herein by reference to Exhibit 10(f) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1988).*

10(h) 1984 Employee Stock Option Plan of the Registrant
(incorporated herein by reference to Exhibit 10(f) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1989).*

10(i) 1990 Stock Option Plan of the Registrant, as amended
(incorporated herein by reference to Exhibit 10(g) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1991).*

10(j) Stockholders' Agreement dated May 18, 1988 among the
Registrant and the persons listed on Schedule A thereto
(incorporated herein by reference to Exhibit 10(h) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1988).

-12-


10(k) Key Executive Disability Plan of the Registrant
(incorporated herein by reference to Exhibit 10(m) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1988).*

10(l) Loan and Security Agreement dated February 15, 1994
between the Jaclyn, Inc. Employee Stock Ownership Plan
and Trust and National Westminster Bank, New Jersey
(incorporated herein by reference to Exhibit 10(l) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1994).

10(m) Guaranty dated February 15, 1994 of Empress Handbag
Co., Inc., The Bag Factory Shops, Inc., JLN, Inc. and
the Registrant in favor of National Westminster Bank,
New Jersey (incorporated herein by reference to Exhibit
10(m) to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June 30,
1994).

10(n) Amendment to Loan and Security Agreement dated August
2, 1994 between the Jaclyn, Inc. Employee Stock
Ownership Plan and Trust and National Westminster
Bank, New Jersey (incorporated herein by reference to
Exhibit 10(n) to the Registrant's Annual Report on Form
10-K, File No. 1-5863, for the fiscal year ended June
30, 1994).

10(o) Split-Dollar Insurance Agreement dated August 15, 1987
between the Registrant and Robert Chestnov
(incorporated herein by reference to Exhibit 10(m) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1990).*

10(p) Split-Dollar Insurance Agreement dated August 15, 1987
between the Registrant and Howard Ginsburg
(incorporated herein by reference to Exhibit 10(n) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1990).*

10(q) Split-Dollar Insurance Agreement dated August 15, 1987
between the Registrant and Allan Ginsburg (incorporated
herein by reference to Exhibit 10(o) to the
Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1990).*

-13-


10(r) Letter Agreements dated February 15, 1994 between the
Jaclyn, Inc. Employee Stock Ownership Plan and each of
Allan Ginsburg, Robert Chestnov, Howard Ginsburg,
Bonnie Sue Levy, Bernice Gailing and Jaclyn Hartstein
(incorporated herein by reference to Exhibit 10(r) to
the Registrant's Annual Report on Form 10-K, File
No. 1-5863, for the fiscal year ended June 30, 1994).

21 Subsidiaries of the Registrant.

27 Financial Data Schedule.

- --------------------
* Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed by the Registrant during the three months
ended June 30, 1995.

c) Exhibits.

Exhibits are listed in response to Item 14(a)3.

d) Financial Statement Schedules.

Financial Statement Schedules are listed in response to Item 14(a)2.


-14-




JACLYN, INC. AND SUBSIDIARIES

Consolidated Financial Statements for the
Years Ended June 30, 1995, 1994 and 1993
and Independent Auditors' Report




JACLYN, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Page

INDEPENDENT AUDITORS' REPORT ...................................... F-1

FINANCIAL STATEMENTS:

Consolidated Balance Sheets .................................... F-2

Consolidated Statements of Operations .......................... F-3

Consolidated Statements of Changes in Stockholders' Equity ..... F-4

Consolidated Statements of Cash Flows .......................... F-5-6

Notes to Consolidated Financial Statements ..................... F-7-14

SUPPLEMENTAL SCHEDULE

Valuation and Qualifying Accounts .............................. F-15




INDEPENDENT AUDITORS' REPORT

Board of Directors
Jaclyn, Inc.
West New York, New Jersey

We have audited the accompanying consolidated balance sheets of Jaclyn, Inc. and
Subsidiaries as of June 30, 1995 and 1994, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended June 30, 1995. Our audits also included the
consolidated financial statement schedule of Jaclyn Inc. and Subsidiaries listed
in item 14(a)2. These financial statements and schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Jaclyn, Inc. and Subsidiaries as of
June 30, 1995 and 1994, and the results of their operations and their cash flows
for each of the three years in the period ended June 30, 1995 in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note J to the consolidated financial statements, effective July
1, 1993, the Company changed its method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards No. 109.

September 15, 1995

F-1



JACLYN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND 1994

ASSETS 1995 1994
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents ........................ $ 243,000 $ 185,000
Marketable securities ............................ -- 5,675,000
Available for sale securities .................... 4,948,000 --
Accounts receivable, less allowance for doubtful
accounts: 1995, $301,000; 1994, $375,000 ....... 10,550,000 14,995,000
Inventories ...................................... 7,742,000 10,019,000
Prepaid expenses and other current assets ........ 583,000 697,000
Deferred income taxes ............................ 1,739,000 747,000
Prepaid and refundable income taxes .............. 596,000 --
----------- -----------
Total current assets ....................... 26,401,000 32,318,000
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET ................. 1,614,000 2,114,000
----------- -----------
OTHER ASSETS ....................................... 394,000 454,000
----------- -----------
$28,409,000 $34,886,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable - bank ............................. $ 3,538,000 $ 5,538,000
Accounts payable ................................. 3,022,000 4,093,000
Dividends payable ................................ -- 336,000
Commissions payable .............................. 375,000 237,000
Accrued payroll and related expenses ............. 989,000 1,206,000
Other current liabilities ........................ 2,254,000 1,780,000
----------- -----------
Total current liabilities .................. 10,178,000 13,190,000
----------- -----------
GUARANTEED BANK LOAN - ESOP ........................ 888,000 1,150,000
OTHER NON-CURRENT LIABILITIES ...................... 33,000 31,000
DEFERRED INCOME TAXES .............................. 1,368,000 1,812,000

COMMITMENTS

STOCKHOLDERS' EQUITY:
Preferred stock, par value $1: authorized,
1,000,000 shares, issued, none.................. -- --
Common stock, par value $1: authorized,
5,000,000 shares ............................... 3,369,000 3,366,000
Additional paid-in capital ....................... 12,117,000 12,094,000
Retained earnings ................................ 8,341,000 11,376,000
----------- -----------
23,827,000 26,836,000
Less:
Treasury stock at cost ......................... 7,011,000 6,983,000
Guaranteed bank loan - ESOP .................... 888,000 1,150,000

Add:
Unrealized gain on available for sale
securities ................................... 14,000 --
----------- -----------
Total stockholders' equity ............... 15,942,000 18,703,000
----------- -----------
$28,409,000 $34,886,000
=========== ===========

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

F-2




JACLYN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 1995, 1994 AND 1993





1995 1994 1993
----------- ----------- -----------

REVENUES:
Net sales ............................................... $73,577,000 $82,393,000 $63,520,000
Other income, net ....................................... 317,000 422,000 454,000
----------- ----------- -----------
73,894,000 82,815,000 63,974,000
----------- ----------- -----------
COSTS AND EXPENSES:
Cost of goods sold ...................................... 58,639,000 58,298,000 48,044,000
Shipping, selling and administrative expenses ........... 17,834,000 21,741,000 15,786,000
Interest expense ........................................ 309,000 224,000 59,000
Restructuring costs ..................................... 995,000 -- --
Cost of product recall .................................. -- -- 2,000,000
----------- ----------- -----------
77,777,000 80,263,000 65,889,000
----------- ----------- -----------
(LOSS) EARNINGS BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES ............................. (3,883,000) 2,552,000 (1,915,000)

(BENEFIT) PROVISION FOR INCOME TAXES ...................... (1,563,000) 965,000 (786,000)

CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES ............................. -- -- (750,000)
----------- ----------- -----------
NET (LOSS) EARNINGS ....................................... $(2,320,000) $ 1,587,000 $ (379,000)
=========== =========== ===========
(LOSS) EARNINGS PER COMMON SHARE
BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING FOR INCOME TAXES .......................... $(.86) $.59 $(.42)

CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES ............................. -- -- .28
----------- ----------- -----------
(LOSS) EARNINGS PER COMMON SHARE .......................... $(.86) $.59 $(.14)
=========== =========== ===========


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

F-3





JACLYN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 30, 1995, 1994 AND 1993



Unrealized
Gain (Loss)
Common Stock Additional Available Treasury Stock Guaranteed
--------------------- Paid-in for sale Retained ------------------ Bank Loan-
Shares Amount Capital Securities Earnings Shares Amount ESOP
--------- ---------- ----------- ---------- ----------- ------- ---------- ----------

BALANCE, JUNE 30, 1992 ......... 3,306,728 $3,307,000 $11,644,000 $12,857,000 629,560 $6,465,000 $ --

Net loss, year ended
June 30, 1993 ................ -- -- -- (379,000) -- -- --
Exercise of stock options ...... 50,928 51,000 393,000 -- -- -- --
Dividends:
Cash, $.50 per share ......... -- -- -- (1,339,000) -- -- --
Acquisition of treasury stock .. -- -- -- -- 41,383 469,000 --
--------- ---------- ----------- ------- ----------- ------- ---------- ----------

BALANCE, JUNE 30, 1993 ......... 3,357,656 3,358,000 12,037,000 11,139,000 670,943 6,934,000 --

Net earnings, year ended
June 30, 1994 ................ -- -- -- 1,587,000 -- -- --
Exercise of stock options ...... 7,862 8,000 57,000 -- -- -- --
Dividends:
Cash, $.50 per share ......... -- -- -- (1,350,000)
Acquisition of treasury stock .. -- -- -- -- 4,230 49,000 --
Guaranteed bank loan - ESOP .... -- -- -- -- -- -- 1,150,000
--------- ---------- ----------- ------- ----------- ------- ---------- ----------

BALANCE, JUNE 30, 1994 ......... 3,365,518 3,366,000 12,094,000 11,376,000 675,173 6,983,000 1,150,000

Unrealized gain on
available for sale
securities at July 1, 1994 ... -- -- -- 33,000 -- -- -- --
Unrealized loss on
securities available
for sale ..................... (19,000)
Net loss, year ended
June 30, 1995 ................ -- -- -- (2,320,000)
Exercise of stock options ...... 3,215 3,000 23,000
Dividends:
Cash, $.25 per share ......... -- -- -- (715,000)
Acquisition of treasury stock .. -- -- -- -- -- 2,155 28,000
ESOP loan repayment ............ -- -- -- -- -- -- -- (262,000)
--------- ---------- ----------- ------- ----------- ------- ---------- ----------
BALANCE, JUNE 30, 1995 ......... 3,368,733 $3,369,000 $12,117,000 $14,000 $ 8,341,000 677,328 $7,011,000 $ 888,000
========= ========== =========== ======= =========== ======= ========== ==========


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

F-4


JACLYN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 1995, 1994 AND 1993





1995 1994 1993
----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings ................................. $(2,320,000) $ 1,587,000 $ (379,000)
Adjustments to reconcile net (loss) earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization ..................... 430,000 360,000 510,000
Deferred income taxes ............................. (1,436,000) 122,000 (948,000)
Gain from termination of capital lease ............ -- -- (109,000)
Cumulative effect of changes in accounting for
income taxes .................................... -- -- (750,000)
Gain on sale of equipment ......................... (30,000) (19,000) (11,000)
Changes in assets and liabilities:
Sales of trading securities ....................... 1,662,000 -- --
Purchases of trading securities ................... (620,000) -- --
Decrease (increase) in accounts receivable ........ 4,445,000 (2,992,000) (1,844,000)
Decrease (increase) in inventories ................ 2,277,000 (2,748,000) (1,513,000)
Decrease in prepaid expenses and other
current assets .................................. 114,000 23,000 59,000
(Increase) in prepaid and refundable
income taxes .................................... (596,000) -- --
Decrease in deferred income taxes ................. -- 538,000 543,000
Decrease in security deposits and other assets .... 53,000 154,000 291,000
(Decrease) increase in accounts
payable and other current liabilities ........... (1,012,000) (88,000) 2,431,000
----------- ----------- -----------
Net cash provided by (used in)
operating activities ..................... 2,967,000 (3,063,000) (1,720,000)
----------- ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment ................. (288,000) (573,000) (550,000)
Proceeds from sale of property and equipment ........ 388,000 104,000 132,000
Acquisitions of net assets .......................... -- -- (400,000)
Sales of marketable securities ...................... -- 1,910,000 67,000
Purchases of securities available for sale .......... (1,247,000) -- --
Sales of securities available for sale .............. 955,000 -- --
----------- ----------- -----------
Net cash (used in) provided by
investing activities ..................... (192,000) 1,441,000 (751,000)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid ...................................... (715,000) (1,350,000) (1,339,000)
Exercise of stock options ........................... 26,000 65,000 444,000
Acquisition of treasury stock ....................... (28,000) (49,000) (469,000)
(Decrease) increase in notes payable - bank ......... (2,000,000) 2,438,000 3,100,000
----------- ----------- -----------
Net cash (used in) provided by
financing activities ..................... (2,717,000) 1,104,000 1,736,000
----------- ----------- -----------



The accompanying notes are an integral part of these financial statements.
(Continued)

F-5



JACLYN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 1995, 1994 AND 1993





1995 1994 1993
----------- ----------- -----------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ................................ $ 58,000 $ (518,000) $ (735,000)

CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD ............................. 185,000 703,000 1,438,000
----------- ----------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD ................................... $ 243,000 $ 185,000 $ 703,000
=========== =========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the year for:
Interest .................................... $ 309,000 $ 224,000 $ 57,000
=========== =========== ==========
Income taxes ................................ $ 543,000 $ 885,000 $ 242,000
=========== =========== ==========
NONCASH ITEMS:
Unrealized gain on available for
sale securities ............................... $ 14,000 $ -- $ --
=========== =========== ==========



The accompanying notes are an integral part of these financial statements.
(Concluded)

F-6




JACLYN, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

Jaclyn, Inc. and its subsidiaries (the "Company") are engaged in the design,
manufacture, marketing, and sale of handbags, accessories, apparel and related
products.

The consolidated financial statements include the accounts of the Company and
all of its majority-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated. Certain reclassifications have
been made to the 1994 and 1993 financial statements to conform to the
presentation used in 1995.

Effective July 1, 1994 the Company adopted Statement of Financial Accounting
Standards No. 115 "Accounting for Investments in Debt and Equity Securities,"
(SFAS 115) the effect of which is not considered material in relation to the
financial statements. All securities classified as trading are recorded at fair
market value and the resulting unrealized gain (loss), net of applicable taxes,
is recorded in the Consolidated Statement of Operations. All securities
classified as available for sale are recorded at fair market value and the
resulting unrealized gain (loss) is recorded as a component of Stockholder's
Equity.

Prior to the adoption of SFAS 115, marketable equity securities and other
securities classified as current are carried at the lower of aggregate cost or
market. The cost of securities sold is determined on the specific identification
method.

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Property, plant and equipment are stated at cost. The Company provides for
depreciation and amortization on the straight-line method based on the shorter
of the estimated useful lives or lease period of the respective depreciable or
amortizable assets.

Goodwill, which represents the excess of purchase price over fair value of net
assets acquired, is amortized on a straight line basis over the expected period
to be benefited of 5 to 20 years. Management periodically evaluates the
recoverability of goodwill based upon current and projected operations.

Cash in excess of daily requirements is invested in certificates of deposits and
money market funds with maturities of three months or less. Such investments are
deemed to be cash equivalents.

Certain reclassifications were made to prior year balances to reflect current
year presentation.

NOTE B -- SECURITIES
1995 1994
---------- ----------
Trading securities:
Market: $1,045,000 at June 30, 1994 .......... $ -- $1,042,000

Securities available for sale :
Cost: $4,925,000 at June 30, 1995; and
Market: $4,685,000 at June 30, 1994 ........ 4,948,000 4,633,000
---------- ----------
$4,948,000 $5,675,000
========== ==========


At June 30, 1995 and 1994, securities had unrealized gains of $23,000 and
$104,000, respectively, and unrealized losses of $-0- and $40,000, respectively.

F-7



The net realized gain on the sale of securities, which is included in other
income, net in the Consolidated Statement of Operations, is $13,000, $28,000 and
$7,000 for the fiscal years ended June 30, 1995, 1994 and 1993, respectively.

NOTE C -- INVENTORIES

Inventories consist of:

1995 1994
---------- -----------
Raw materials ..................... $1,829,000 $ 1,969,000
Work in process ................... 1,065,000 2,127,000
Finished goods .................... 4,848,000 5,923,000
---------- -----------
$7,742,000 $10,019,000
========== ===========



NOTE D -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is summarized as follows:

1995 1994
---------- ----------
Land ............................. $ 182,000 $ 182,000
Buildings ........................ 1,311,000 1,311,000
Machinery and equipment .......... 1,227,000 1,923,000
Furniture and fixtures ........... 357,000 506,000
Leasehold improvements ........... 633,000 1,116,000
Automobiles and trucks ........... 82,000 436,000
---------- ----------
3,792,000 5,474,000
Less accumulated depreciation
and amortization ............... 2,178,000 3,360,000
---------- ----------
$1,614,000 $2,114,000
========== ==========


NOTE E -- LEASES AND COMMITMENTS

The Company leases office, warehouse and retail sales facilities under
non-cancelable leases that expire in various years through the year 2000. The
leased warehouse is owned by an entity controlled by certain officers and
stockholders of the Company. The Company paid $250,300 for each of the years
ended June 30, 1995, 1994 and 1993. This lease agreement extends through June
30, 1996 and will not be renewed due to the fiscal 1995 corporate restructuring
(see Note P). The Company also leases other facilities from unrelated parties at
minimum annual rentals, plus real estate taxes and certain other expenses.

Future minimum payments under noncancellable operating leases with initial or
remaining terms of one year or more are as follows:

Showroom,
Assembling
Year Ended and Distribution
June 30, Facilities
---------- ----------------
1996 ..................... $ 685,000
1997 ..................... 351,000
1998 ..................... 142,000
1999 ..................... 24,000
2000 ..................... 14,000

Rental expense, including real estate taxes, for all operating leases, totaled
$1,062,000, $1,046,000 and $973,000 for 1995, 1994 and 1993, respectively.

F-8



NOTE F -- CREDIT FACILITIES

The Company has a line of credit with a bank to issue short-term loans, letters
of credit and bankers acceptances amounting to $20,000,000. At June 30, 1995 and
1994, the Company was contingently obligated on open letters of credit for
approximately $7,567,000 and $7,483,000, respectively. Within the $20,000,000
credit line, the Company can borrow up to $10,000,000 on an unsecured short-term
line of credit and a banker's acceptance line. Borrowings on the unsecured
short-term line of credit were $2,500,000 and $3,200,000 as of June 30, 1995 and
1994, respectively. Borrowings on the bankers acceptance line were $1,038,000
and $2,338,000 as of June 30, 1995 and 1994, respectively. These loans were at
the bank's prime rate or below. During fiscal 1995, the average amount
outstanding under the short-term line was $4,541,000 with a weighted average
interest rate thereon of 7.2%. During 1994, the average amount outstanding under
the short-term line was $3,508,000 with a weighted average interest rate thereon
of 5.7%. The maximum amount outstanding during fiscal 1995 and fiscal 1994 was
$6,931,000 and $7,988,000, respectively.

NOTE G -- STOCK OPTIONS

During the year ended June 30, 1985, an Incentive Stock Option Plan permitting
the granting of options to purchase up to 125,000 shares of common stock
(subsequently adjusted for stock dividends and a 4-for-3 stock split) was
approved. Under the Plan, the option price cannot be less than the fair market
value of the stock as of the date of the granting of the option and 110% of the
fair market value for certain management employees. Options, which may be
granted to August 1994, are exercisable as determined by the Board of Directors.

Effective for the year ended June 30, 1988, the incentive stock option plans
were amended, permitting the granting of an additional 250,000 shares
(subsequently adjusted for stock dividends).

During the year ended June 30, 1991 an Incentive Stock Option Plan permitting
the granting of options to purchase up to 250,000 shares of common stock was
approved. Under the Plan, the option price cannot be less than the fair market
value of the stock as of the date of the granting of the option and 110% of the
fair market value for certain management employees. Options, which may be
granted to December 2000, are exercisable as determined by the Board of
Directors.

At June 30, 1995, 37,583 shares of common stock were reserved in connection with
the above plans. Changes under the plans for each of the three years in the
period ended June 30, 1995, are as follows:

1995 1994 1993
------ ------ ------
Shares under option,
beginning of year ............. 152,021 52,338 122,023
Granted ......................... 25,000 107,545 --
Cancelled ....................... (19,221) -- (18,757)
Exercised ....................... (3,215) (7,862) (50,928)
------- ------- -------
Shares under option,
end of year ................... 154,585 152,021 52,338
======= ======= =======
Shares exercisable,
end of year ................... 129,585 152,021 52,338
======= ======= =======
Option prices of
shares exercisable ............ $4.13-13.61 $6.38-13.61 $6.38-11.34
=========== =========== ===========


F-9




Non-qualified stock options previously granted to certain affiliated individuals
were at the fair market value at the date of grant.

1995 1994 1993
----- ----- ------
Outstanding and exercisable,
beginning of year ............................ -- 5,200 16,446
Granted ........................................ -- -- --
Exercised ...................................... -- -- --
Expired ........................................ -- (5,200) (11,246)
----- ----- ------
Outstanding and exercisable,
end of year .................................. -- -- 5,200
===== ===== ======

NOTE H -- PREFERRED STOCK

The Board of Directors of the Company has authority (without action by the
stockholders) to issue the authorized and unissued preferred stock in one or
more series and, within certain limitations, to determine the voting rights,
preference as to dividends and in liquidation, conversion and other rights of
each such series. No shares of preferred stock have been issued.

NOTE I -- (LOSS) EARNINGS PER SHARE

(Loss) earnings per share of common stock is computed by dividing net (loss)
earnings by the weighted average number of common shares outstanding during each
year. The assumed exercise of stock options has not been included in the
calculation as the effect is not material. The weighted average common shares
outstanding used to calculate (loss) earnings per share were 2,691,352,
2,688,555 and 2,675,815, for the fiscal years 1995, 1994 and 1993, respectively.

NOTE J -- INCOME TAXES

Effective July 1, 1992, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The Company
elected to reflect the adoption of SFAS No. 109 as a cumulative effect of a
change in accounting principle; accordingly, the Company recorded a credit of
$750,000 during the first quarter of the fiscal year ended June 30, 1993.

1995 1994 1993
----------- -------- ---------
Current:
Federal ....................... $ (308,000) $625,000 $ --
State and local ............... 33,000 133,000 41,000
Foreign ....................... 148,000 85,000 121,000
----------- -------- ---------
(127,000) 843,000 162,000
Deferred:
Federal and state ............. (1,436,000) 122,000 (948,000)
----------- -------- ---------
Provision (benefit) ............. $(1,563,000) $965,000 $(786,000)
=========== ======== =========



F-10



A reconciliation between the provision for income taxes computed by applying the
federal statutory rate to (loss) income before income taxes and the actual
(benefit) provision for income taxes is as follows:

1995 1994 1993
----- ---- -----
Provision (benefit) for income
taxes at statutory rate ............... (34.0)% 34.0% (34.0)%
State and local income taxes net
of federal tax benefit ................ (6.3) 3.4 1.4
Tax exempt interest ..................... (2.3) (4.5) (7.5)
Other -- reversal of prior tax
estimates ............................. 2.3 4.9 (.9)
----- ---- -----
Effective tax rate ...................... (40.3)% 37.8% (41.0)%
===== ==== =====

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The income tax effects of
significant items comprising the Company's net deferred tax asset as of June 30,
1995 and 1994 are as follows:




June 30,
-----------------------------------------------------
1995 1994
--------------------------- -----------------------
Assets Liabilities Assets Liabilities
---------- ----------- -------- -----------

Depreciation and amortization ......... $ -- $ 437,000 $ -- $ 399,000
Leases ................................ -- 309,000 -- 356,000
Foreign taxes ......................... -- 255,000 -- 807,000
Inventory ............................. 237,000 -- 341,000
Bad debt and other reserves ........... 508,000 -- 369,000 --
Reserve for sales allowaces ........... 354,000 -- -- --
Reserve for restructuring costs ....... 212,000 -- -- --
Reserve for royalties ................. 354,000 -- -- --
Other ................................. 292,000 367,000 37,000 250,000
---------- ---------- -------- ----------
$1,739,000 $1,368,000 $747,000 $1,812,000
========== ========== ======== ==========


NOTE K -- EMPLOYEES' PENSION TRUST

The Company and its subsidiaries have a trusteed defined benefit pension plan
for certain of their salaried and hourly personnel. The plan provides pension
benefits that are based on a fixed amount of compensation per year of service,
career average pay or on the employee's compensation during a specified number
of years before retirement. The Company's funding policy is to make annual
contributions required by the Employee Retirement Income Security Act of 1974.

F-11




The net pension expense for 1995, 1994 and 1993 included the following
components:




1995 1994 1993
-------- -------- --------

Service cost -- benefits earned during the period .. $144,000 $137,000 $116,000
Interest cost on projected benefit obligation ...... 137,000 145,000 167,000
Actual return on assets ............................ (2,000) (75,000) 68,000
Net amortization and deferral ...................... (204,000) (146,000) (315,000)
-------- -------- --------
Net pension expense ................................ $ 75,000 $ 61,000 $ 36,000
======== ======== ========



Assumptions used in determining the net pension charges were:


1995 1994 1993
----- ----- -----
Discount rates ................................. 7.25% 7.25% 7.25%
Rates of increase in compensation levels ....... 2.50% 2.50% 2.50%
Expected long-term rate of return on assets .... 6.75% 7.25% 7.25%


The following table sets forth the plan's funded status and amount recognized in
the Company's balance sheets at June 30, 1995 and 1994:

1995 1994
---------- ----------
Actuarial present value of benefit obligations:
Vested benefit obligation ..................... $1,541,000 $1,741,000
========== ==========
Accumulated benefit obligation ................ $1,612,000 $1,788,000
========== ==========
Plan assets at fair value ..................... $2,258,000 $2,591,000
Less projected benefit obligation ............. 1,911,000 2,237,000
---------- ----------
Plan assets in excess of projected
benefit obligation .......................... 347,000 354,000
Unrecognized prior service cost ............... 6,000 7,000
Unrecognized net (gain) loss .................. 28,000 (56,000)
Unrecognized net asset ........................ (360,000) (399,000)
---------- ----------
Prepaid (accrued) pension costs ............... $ 21,000 $ (94,000)
========== ==========

Plan assets at both June 30, 1995 and June 30, 1994, were primarily U.S.
Government securities and high-grade corporate notes. Also included in plan
assets at those dates were 22,654 shares of the common stock of the Company with
a market value of $125,000, and $286,000, respectively.

F-12




NOTE L -- SALES TO MAJOR CUSTOMERS

During the year ended June 30, 1995, 1994 and 1993, revenues derived from sales
to one customer were 15%, 18% and 10%, respectively. Sales to a second customer
were 13%, 6% and 3%, respectively, and to a third customer were 8%, 5% and 3%,
respectively.

NOTE M -- EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

The Company established a non contributory Employee Stock Ownership Plan (the
"ESOP") and Trust, for its employees who are not covered by a collective
bargaining agreement.

On February 15, 1994 the ESOP authorized the Trust to borrow $1,150,000 from a
bank, which is guaranteed by the Company. The debt bears interest at the prime
rate and is payable in a minimum of ten annual installments. The proceeds,
together with the Company's contribution of $100,000 for the fiscal year ended
June 30, 1994, representing interest and other costs, were used to purchase
90,000 shares of common stock at $13.125 (the market price on February 14, 1994)
from members of the control group representing officers and shareholders of the
Company. As of June 30, 1995, the guaranteed ESOP bank loan was approximately
$888,000.

Contributions to the ESOP are at the discretion of the Company's Board of
Directors. During fiscal 1995, the Company contributed appoximately $315,000 to
the ESOP. ESOP expense was approximately $250,000 for the year ended June 30,
1995, which includes $182,000 of compensation expense and 68,000 of interest
expense. Compensation expense related to the plan is based upon the number of
shares allocated to participants in the current year. No ESOP expense was
incurred for the year June 30, 1994.

Vesting occurs after five years of service. However, if the ESOP is deemed
"top-heavy", vesting will occur at the rate of 20% per year after the completion
of the second year of service.

NOTE N -- ACQUISITION

On February 11, 1993, the Company purchased certain assets of Susan Gail Handbag
Co. Inc. ("Susan Gail"). Susan Gail is an importer and distributor of better
designer handbags. The results of operations of Susan Gail, subsequent to the
acquisition date, are included in the consolidated statements of operations. The
purchase price approximated $400,000. The acquisition is accounted for under the
purchase method of accounting.

The pro forma effect of this acquisition on results of operations for the year
ended June 30, 1993 is not material.

NOTE O -- COST OF PRODUCT RECALL

On March 25, 1993, the Company announced the voluntary recall of certain
products, manufactured under the name Barney(R), due to manufacturer's defects.
During the fiscal quarter ended March 31, 1993, a $2,000,000 pre-tax charge
against earnings was recorded in connection with the recall.

NOTE P -- CORPORATE RESTRUCTURING

During fiscal 1995, the Company instituted a corporate-wide restructuring
program as a result of experiencing declines in sales and margins, and due to
increased direct importation by accessory and apparel retailers. This program,
which was completed by June 30, 1995, resulted in a pre-tax restructuring charge
of $995,000 representing employee severance and other exit costs in connection
with the closure of a warehouse and showroom. Additional costs of $1,761,000
were incurred primarily for the write-down of inventory to market value relating
to certain of the Company's divisions, as well as for costs incurred during the
wind-down of operations in those closed facilities.

F-13



NOTE Q -- FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts and notes payable, accrued expenses and
other non-current liabilities are reflected at carrying value on the balance
sheet. The estimated fair value of the ESOP is reflected on the balance sheet.
Securities are recorded at fair value, which is based principally on quoted
market prices.

NOTE R -- UNAUDITED QUARTERLY FINANCIAL DATA

Summarized quarterly financial data, in thousands of dollars except for per
share amounts, for the fiscal years ended June 30, 1995 and 1994, are as
follows:





Three Months Ended
-------------------------------------------------------
June 30, March 31, December 31, September 30,
1995 1995 1994 1994
------- ------- ------------ -------------

Revenue:
Net sales ...................... $16,935 $17,289 $15,552 $23,801
Other income ................... 80 80 54 103
------- ------- ------- -------
$17,015 $17,369 $15,606 $23,904
======= ======= ======= =======
Gross profit ..................... $ 2,691 $ 4,818 $ 2,413 $ 5,016
======= ======= ======= =======
Net (loss) earnings .............. $ (720)(3) $ (26)(2) $(1,957)(1) $ 383
======= ======= ======= =======
(Loss) earnings per common share.. $ (.28) $ (.01) $ (.73) $ .16
======= ======= ======= =======




Three Months Ended
-------------------------------------------------------
June 30, March 31, December 31, September 30,
1994 1994 1993 1993
------- ------- ------------ -------------

Revenue:
Net sales ...................... $19,790 $15,766 $18,629 $28,208
Other income ................... 91 108 116 107
------- ------- ------- -------
$19,881 $15,874 $18,745 $28,315
======= ======= ======= =======
Gross profit ..................... $ 6,009 $ 4,272 $ 5,111 $ 8,703
======= ======= ======= =======
Net earnings ..................... $ 64 $ 148 $ 297 $ 1,078
======= ======= ======= =======
Earnings per common share ........ $ .02 $ .06 $ .11 $ .40
======= ======= ======= =======

- -----------------

(1) Includes a pre-tax restructuring charge of $995 and expenses of $525,
primarily for the write-down of inventory in connection with the
restructuring.

(2) Includes pre-tax costs of $390 related to the restructuring representing
additional costs in connection with the wind-down of operations of the
facilities closed.

(3) Includes pre-tax costs of $846 related to the restructuring representing
additional costs in connection with the wind-down of operations of the
facilities closed.



F-14





JACLYN, INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS






Column A Column B Column C Column D Column E
-------- -------- ----------------------- -------- --------
Additions
-----------------------
(Credited)
Balance Charged to Charged to Balance
at Beginning Costs and Other Deductions at End
Description of Period Expenses Accounts(1) (2) of Period
----------- ----------- --------- ----------- ---------- ---------


Allowance for doubtful accounts:
Year ended June 30, 1995 ................ $375,000 $(114,000) $79,000 $ 39,000 $301,000
======== ========= ======= ======== ========
Year ended June 30, 1994 ................ $298,000 $ 202,000 $56,000 $181,000 $375,000
======== ========= ======= ======== ========
Year ended June 30, 1993 ................ $225,000 $ 121,000 $52,000 $100,000 $298,000
======== ========= ======= ======== ========

- ----------------

(1) Collection accounts previously written off.
(2) Doubtful accounts written off.





F-15
























SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

JACLYN, INC.

By: /s/ ALLAN GINSBURG
------------------------------
September 27, 1995 Allan Ginsburg,
Chairman of the Board

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:



/s/ ALLAN GINSBURG Chairman of the Board September 27, 1995
- ----------------------------- and Director
Allan Ginsburg


/s/ ROBERT CHESTNOV President, Principal September 27, 1995
- ----------------------------- Executive Officer and
Robert Chestnov Director


/s/ ANTHONY C. CHRISTON Chief Financial Officer, September 27, 1995
- -------------------------- Principal Financial and
Anthony C. Christon Accounting Officer


/s/ ABE GINSBURG Director September 27, 1995
- --------------------------
Abe Ginsburg


/s/ HOWARD GINSBURG Director September 27, 1995
- --------------------------
Howard Ginsburg


/s/ MARTIN BRODY Director September 27, 1995
- --------------------------
Martin Brody


-15-




====================================================================





SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------------------------------






EXHIBITS

to

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR
ENDED JUNE 30, 1995






----------------------------------------




JACLYN, INC.





====================================================================




EXHIBIT INDEX

Exhibit No. Description Page
---------- ----------- ----

3(a) Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3(a)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1994).

3(b) By-Laws of the Registrant (incorporated herein by
reference to Exhibit 3(b) to the Registrant's
Annual Report on Form 10-K, File No. 1-5863, for
the fiscal year ended June 30, 1991).

10(a) Lease dated September 1, 1968 relating to
warehouse facilities of the Registrant located in
North Bergen, New Jersey (incorporated herein by
reference to Exhibit 13(c) of Amendment No. 1 to
the Registrant's Registration Statement on Form
S-1, Registration No. 2-29970, filed October 1,
1968).

10(b) Renewal dated March 19, 1986 of Lease dated
September 1, 1968 relating to warehouse facilities
of the Registrant located in North Bergen, New
Jersey (incorporated herein by reference to
Exhibit 10(c) to the Registrant's Annual Report on
Form 10-K, File No. 1-5863, for the fiscal year
ended June 30, 1987).

10(c) Lease dated January 29, 1987 relating to warehouse
facilities of the Registrant located in North
Bergen, New Jersey (incorporated herein by
reference to Exhibit 10(e) to the Registrant's
Annual Report on Form 10-K, File No. 1-5863, for
the fiscal year ended June 30,1987).

10(d) Lease dated as of February 11, 1993 with 33 East
33rd Street Realty Associates relating to
showroom, warehouse and distribution facilities of
the Registrant located in New York, New York
(incorporated herein by reference to Exhibit 10(d)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1993).

10(e) Lease dated January 28, 1994 with 330 Realty
Company relating to office and showroom facilities
located in New York, New York (incorporated herein
by reference to 10(e) to the Registrant's Annual
Report on Form 10-K, File No. 1-5863, for the
fiscal year ended June 30, 1994).

10(f) Lease dated January 28, 1994 between E.H. Handbag
Co. and 330 Realty Company relating to office and
showroom facilities located in New York, New York
(incorporated herein by reference to Exhibit 10(f)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1994).



Exhibit No. Description Page
---------- ----------- ----


10(g) Incentive Stock Option Plan of the Registrant
(incorporated herein by reference to Exhibit 10(f)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1988).*

10(h) 1984 Employee Stock Option Plan of the Registrant
(incorporated herein by reference to Exhibit 10(f)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1989).*

10(i) 1990 Stock Option Plan of the Registrant, as
amended (incorporated herein by reference to
Exhibit 10(g) to the Registrant's Annual Report on
Form 10-K, File No. 1-5863, for the fiscal year
ended June 30, 1991).*

10(j) Stockholders' Agreement dated May 18, 1988 among
the Registrant and the persons listed on Schedule
A thereto (incorporated herein by reference to
Exhibit 10(h) to the Registrant's Annual Report on
Form 10-K, File No. 1-5863, for the fiscal year
ended June 30, 1988).

10(k) Key Executive Disability Plan of the Registrant
(incorporated herein by reference to Exhibit 10(m)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1988).*

10(l) Loan and Security Agreement dated February 15,
1994 between the Jaclyn, Inc. Employee Stock
Ownership Plan and Trust and National Westminster
Bank, New Jersey (incorporated herein by reference
to Exhibit 10(l) to the Registrant's Annual Report
on Form 10-K, File No. 1-5863, for the fiscal year
ended June 30, 1994).

10(m) Guaranty dated February 15, 1994 of Empress
Handbag Co., Inc., The Bag Factory Shops, Inc.,
JLN, Inc. and the Registrant in favor of National
Westminster Bank, New Jersey (incorporated herein
by reference to Exhibit 10(m) to the Registrant's
Annual Report on Form 10-K, File No. 1-5863, for
the fiscal year ended June 30, 1994).

10(n) Amendment to Loan and Security Agreement dated
August 2, 1994 between the Jaclyn, Inc. Employee
Stock Ownership Plan and Trust and National
Westminster Bank, New Jersey (incorporated herein
by reference to Exhibit 10(n) to the Registrant's
Annual Report on Form 10-K, File No. 1-5863, for
the fiscal year ended June 30, 1994).



Exhibit No. Description Page
---------- ----------- ----

10(o) Split-Dollar Insurance Agreement dated August 15,
1987 between the Registrant and Robert Chestnov
(incorporated herein by reference to Exhibit 10(m)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1990).*

10(p) Split-Dollar Insurance Agreement dated August 15,
1987 between the Registrant and Howard Ginsburg
(incorporated herein by reference to Exhibit 10(n)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1990).*

10(q) Split-Dollar Insurance Agreement dated August 15,
1987 between the Registrant and Allan Ginsburg
(incorporated herein by reference to Exhibit 10(o)
to the Registrant's Annual Report on Form 10-K,
File No. 1-5863, for the fiscal year ended June
30, 1990).*

10(r) Letter Agreements dated February 15, 1994 between
the Jaclyn, Inc. Employee Stock Ownership Plan and
each of Allan Ginsburg, Robert Chestnov, Howard
Ginsburg, Bonnie Sue Levy, Bernice Gailing and
Jaclyn Hartstein (incorporated herein by reference
to Exhibit 10(r) to the Registrant's Annual Report
on Form 10-K, File No. 1-5863, for the fiscal year
ended June 30, 1994).

21 Subsidiaries of the Registrant.

27 Financial Data Schedule.

- -----------------------
* Management contract or compensatory plan or arrangement.