Warnaco Group Inc /DE/ - Annual Report (10-K)

Owned Trademarks (a)

Calvin Klein and formatives (beneficially owned for men’s/women’s/children’s underwear, loungewear and sleepwear; see ‘‘Trademarks and Licensing Agreements’’)			Warner’s Olga Body Nancy Ganz ® /Bodyslimmers ® Lejaby (a) Rasurel ®   (a)

Trademarks Licensed in Perpetuity

Trademark			Territory
Speedo (b)			United States, Canada, Mexico, Caribbean Islands
Fastskin ® ( secondary Speedo mark )			United States, Canada, Mexico, Caribbean Islands

Trademarks Licensed for a Term

Trademark			Territory			Expires (j)
Calvin Klein (for men’s/women’s/juniors’ jeans and certain jeans-related products)  (c)			North, South and Central America					12/31/2044
CK/Calvin Klein Jeans (for retail stores selling men’s/women’s/juniors’ jeans and certain jeans-related products and ancillary products bearing the Calvin Klein marks) (c)			Canada, Mexico and Central and South America					12/31/2044
CK/Calvin Klein (for bridge apparel, bridge accessories and retail stores selling bridge apparel and accessories) (d)			All countries constituting European Union, Norway, Switzerland Monte Carlo, Vatican City, Liechtenstein, Iceland and parts of Eastern Europe, Russia, Middle East and Africa			12/31/2046
CK/Calvin Klein (for retail stores selling bridge accessories and jeans accessories)  (e)			Central and South America (excluding Mexico) North America, Europe and Asia			12/31/2044      12/31/2046
Calvin Klein and CK/Calvin Klein (for men’s/women’s/children’s jeans and other related apparel as well as retail stores selling such items and ancillary products)  (d)			Western Europe including Ireland, Great Britain, France, Monte Carlo, Germany, Spain, Portugal, Andorra, Italy, San Marino, Vatican City, Benelux, Denmark, Sweden, Norway, Finland, Austria, Switzerland, Lichtenstein, Greece, Cyprus, Turkey and Malta and parts of Eastern Europe, Russia, the Middle East and Africa, Japan, China, South Korea and ‘‘Rest of Asia’’ (Hong Kong, Thailand, Australia, New Zealand, Philippines, Taiwan, Singapore, Malaysia, Indonesia, New Guinea, Vietnam, Cambodia, Laos, Myanmar, Macau and the Federated State of Micronesia)					12/31/2046
CK/Calvin Klein (for independent or common internet sites for the sale of jeanswear apparel and jeanswear accessories) (e)			North America, Europe and Asia					12/31/2046
CK/Calvin Klein (for independent or common internet sites for the sale of jeanswear apparel and jeanswear accessories) (e)			Central and South America (excluding Mexico)					12/31/2044
Calvin Klein (for jeans accessories) (d)			All countries constituting European Union, Norway, Switzerland, Monte Carlo, Vatican City, Liechtenstein, Iceland and parts of Eastern Europe, Russia, Middle East, Africa and Asia					12/31/2046

			December 29, 2007			% of Total			December 30, 2006			% of Total
Total assets:
Sportswear Group				$	758,311						47.2	%				$	772,154						45.9	%
Intimate Apparel Group					359,508						22.4	%					403,500						24.0	%
Swimwear Group					166,862						10.4	%					310,206						18.5	%
Corporate/Other					321,822						20.0	%					195,115						11.6	%
Total assets				$	1,606,503						100.0	%				$	1,680,975						100.0	%

Sportswear Group

The Sportswear Group designs, sources and markets moderate to premium priced men’s and women’s jeanswear, sportswear and accessories. Net revenues of the Sportswear Group accounted for 50.5% of the Company’s net revenues in Fiscal 2007. The following table sets forth the Sportswear Group’s brand names and their apparel price ranges and types:

Brand Name (a)			Price Range			Type of Apparel
Calvin Klein			Better to premium			Men’s, women’s and children’s (b) designer jeanswear (bottoms and tops) and sportswear; jeans accessories in Europe and Asia
Chaps			Moderate			Men’s sportswear, jeanswear, activewear, knit and woven sports shirts and swimwear (c)

7

The Calvin Klein business includes men’s and women’s jeans and jeans-related products, including outerwear, knit and woven tops and shirts, jeans accessories in Europe and Asia and the CK Calvin Klein ‘‘bridge’’ line of sportswear and accessories in Europe. In the second quarter of Fiscal 2003, the Company renegotiated the term of its Calvin Klein Jeans license, providing the Company with greater control over the design and product development calendar and setting forth the terms of the Company’s license to use the Calvin Klein name in connection with swimwear. The Company believes that this increased flexibility has allowed it to provide better service to retailers, which has resulted in improved sell-through of merchandise at retail. In January 2006, the Company acquired 100% of the shares of the companies that operate the wholesale, distribution and certain retail businesses of Calvin Klein Jeans and accessories in Europe and Asia and the CK Calvin Klein ‘‘bridge’’ line of sportswear and accessories in Europe. See ‘‘— Acquisitions, Dispositions and Discontinued Operations—CKJEA Acquisition.’’ As a result of the CKJEA Acquisition discussed above, the Company has been able to expand the distribution of its Calvin Klein products in Europe and Asia, primarily in its direct-to-consumer business, which accounts for 22.0% of the Sportswear segment’s Fiscal 2007 net revenues.

In addition, on January 31, 2008, the Company entered into certain license agreements with CKI whereby, among other items, the Company acquired the rights to operate Calvin Klein jeans accessories retail stores in Europe, Asia and Latin America, as well as retail stores for Calvin Klein accessories in Europe. Additionally, the Company acquired e-commerce rights in the Americas, Europe and Asia for Calvin Klein Jeans. The Company also secured e-commerce rights in Europe, Asia and Latin America for Calvin Klein jeans accessories. The Company will also sub-license Calvin Klein Golf apparel and golf related accessories in department stores, specialty stores and other channels in Asia.

Chaps is a moderately priced men’s sportswear line providing a more casual product offering to the consumer. During Fiscal 2003, the Company negotiated an amendment and extension of the Chaps license through 2018, assuming the exercise of renewal options and satisfaction of certain conditions. The renegotiated license granted the Company certain rights to extend the brand in terms of both product and distribution channels, which allowed the Company to launch Chaps sportswear in Fiscal 2004 in the mid-tier distribution channel.

The Sportswear Group’s apparel products are distributed primarily through department stores, independent retailers, chain stores, membership clubs, mass merchandisers and, to a lesser extent, specialty stores.

8

The following table sets forth, as of December 29, 2007, the Sportswear Group’s principal distribution channels and certain major customers:    

Channels of Distribution			Customers			Brands
United States
Department Stores			Federated Department Stores			Calvin Klein Jeans
			Carson’s/Bon Ton			Calvin Klein Jeans and Chaps
Independent Retailers			Nordstrom			Calvin Klein Jeans
			Dillard’s and Belk			Calvin Klein Jeans and Chaps
Chain Stores			Kohl’s			Chaps
Membership Clubs			Costco, Sam’s Club and			Calvin Klein Jeans and
			BJ’s			Chaps
Other			Military			Calvin Klein Jeans and Chaps
Europe			Stores operated under shop-in-shop and concession agreements El Corte Ingles			Calvin Klein Jeans
Canada			Hudson Bay Company and Sears			Calvin Klein Jeans and Chaps
			Costco and Sam’s Club			Calvin Klein Jeans and Chaps
Mexico, Central and South America			Liverpool and Sears			Calvin Klein Jeans and Chaps
			Sam’s Clubs			Calvin Klein Jeans and Chaps
			Stores operated under distributor agreements			Calvin Klein Jeans
Asia			Company operated retail stores, shop-in-shop/concession locations and stores under retail licenses or distributor agreements Direct wholesale distributors			Calvin Klein Jeans and Accessories

The Sportswear Group generally markets its products for four retail selling seasons (Spring, Summer, Fall and Holiday). New styles, fabrics and colors are introduced based upon consumer preferences and market trends, and coincide with the appropriate selling season. The Sportswear Group recorded 45.6%, 42.4% and 48.7% of its net revenues in the first halves of Fiscal 2007, Fiscal 2006, and Fiscal 2005, respectively.

During Fiscal 2007, the Sportswear Group had operations in the United States (‘‘U.S.’’), Canada, Mexico, Central and South America, Europe and Asia. The Sportswear Group’s products are entirely sourced from third-party suppliers worldwide.

The following table sets forth the domestic and international net revenues of the Sportswear Group:

			Fiscal 2007			Fiscal 2006			Fiscal 2005
			Net Revenues			% of Total			Net Revenues			% of Total			Net Revenues			% of Total
									(in thousands of dollars)
Net revenues:
United States				$	405,188						43.1	%				$	403,002						50.9	%				$	437,275						85.0	%
International					533,959						56.9	%					388,632						49.1	%					76,964						15.0	%
				$	939,147						100.0	%				$	791,634						100.0	%				$	514,239						100.0	%

9

Intimate Apparel Group

The Intimate Apparel Group designs, sources and markets upper moderate to premium priced intimate apparel and other products for women and better to premium priced men’s underwear and loungewear. Net revenues of the Intimate Apparel Group accounted for approximately 33.8% of the Company’s net revenues in Fiscal 2007.

The Intimate Apparel Group targets a broad range of consumers and provides products across a wide range of price points. The Company’s design team strives to design products of a price, quality, fashion and style that meet its customers’ demands.

The following table sets forth the Intimate Apparel Group’s brand names and the apparel price ranges and types as of February 15, 2008:

Brand Name			Price Range			Type of Apparel
Calvin Klein Underwear			Better to premium			Women’s intimate apparel and sleepwear and men’s underwear and loungewear
Warner’s			Moderate to better			Women’s intimate apparel
Olga			Moderate to better			Women’s intimate apparel
Olga’s Christina			Better			Women’s intimate apparel
Body Nancy Ganz/Bodyslimmers			Better to premium			Women’s intimate apparel

The Calvin Klein Underwear women’s lines consist primarily of women’s underwear, bras, panties, daywear, loungewear and sleepwear. The Calvin Klein men’s lines consist primarily of men’s underwear, briefs, boxers, T-shirts, loungewear and sleepwear. According to The NPD Group (‘‘NPD’’), a market research firm, Calvin Klein men’s underwear was the number two selling brand of men’s underwear in Fiscal 2007 and Fiscal 2006 in U.S. department stores participating in the surveys. For women’s underwear, Calvin Klein was the number three selling brand of panties in Fiscal 2007, up from the number four selling brand of panties in Fiscal 2006 in U.S. department stores participating in the surveys. Calvin Klein was the number five selling brand of bras in Fiscal 2007 and Fiscal 2006 in U.S. department stores participating in the surveys.

The Warner’s and Olga lines consist primarily of bras and panties. According to NPD, Warner’s was the number six selling brand of bras in Fiscal 2007, up from the number seven selling brand of bras in Fiscal 2006, in U.S. department stores participating in the surveys. The Body Nancy Ganz/Bodyslimmers line is primarily a shapewear line.

The Company’s Intimate Apparel brands are distributed primarily through department stores, independent retailers, chain stores, membership clubs, Company operated retail stores, shop-in-shop/concession locations, stores operated under retail licenses or franchise and distributor agreements, the Company’s ‘‘ CKU.com ’’ internet website and, to a lesser extent, specialty stores. The Intimate Apparel Group’s Calvin Klein direct to consumer business has experienced rapid growth, and accounted for $114.5 million of the Intimate Apparel Group’s net revenues in Fiscal 2007 compared to $86.7 million in Fiscal 2006, an increase of 32.1%. In addition, the Company uses its design and sourcing expertise to produce private label intimate apparel for customers that may not carry the Company’s branded products.

10

The following table sets forth the Intimate Apparel Group’s principal distribution channels and certain major customers (excluding the Lejaby business, which business was classified as a discontinued operation as of December 29, 2007):

Channels of Distribution			Customers			Brands
United States
Department Stores			Federated Department Stores Carson’s/Bon-Ton			Warner’s, Olga Christina, Body Nancy Ganz and Calvin Klein Underwear
Independent Retailers			Nordstrom, Dillard’s, Neiman Marcus and Belk			Warner’s, Olga and Calvin Klein Underwear
Chain Stores			Kohl’s, JCPenney, Sears and Mervyns			Warner’s, Olga, Body Nancy Ganz and private label
Membership Clubs			Costco and Sam’s Club			Warner’s, Olga, Bodyslimmers and Calvin Klein Underwear
Canada			Hudson Bay Company, Zellers, Sears and Wal-Mart Costco			Warner’s, Olga, Body Nancy Ganz/Bodyslimmers and Calvin Klein Underwear
Mexico, Central and South America			Liverpool, Palacio de Hierro, Suburbia and Sears			Warner’s, Olga, Body Nancy Ganz/Bodyslimmers and Calvin Klein Underwear
			Sam’s Clubs Costco			Warner’s Calvin Klein Underwear
Europe			Harrods, House of Fraser, Galeries Lafayette, Selfridges Debenhams, Au Printemps, Karstadt, Kaufhof and El Corte Ingles			Calvin Klein Underwear
			Company operated retail stores, shop-in-shop/concession locations and stores under retail licenses or distributor agreements			Calvin Klein Underwear
Asia			Company operated retail stores, shop-in-shop/concession locations and stores under retail licenses or distributor agreements			Calvin Klein Underwear

The Intimate Apparel Group generally markets its product lines for three retail-selling seasons (Spring, Fall and Holiday). Its revenues are generally consistent throughout the year, with 43.9%, 44.9% and 47.8% of the Intimate Apparel Group’s net revenues recorded in the first halves of Fiscal 2007, 2006 and 2005, respectively.

11

The Intimate Apparel Group has operations in North America (U.S., Canada and Mexico), Europe (Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland and the United Kingdom) and Asia (Hong Kong, Singapore, China and Macau). The following table sets forth the domestic and international net revenues of the Intimate Apparel Group:

			Fiscal 2007			Fiscal 2006			Fiscal 2005
			Net Revenues			% of Total			Net Revenues			% of Total			Net Revenues			% of Total
									(in thousands of dollars)
Net revenues:
United States				$	304,765						48.4	%				$	280,920						51.5	%				$	257,935						53.4	%
International					324,668						51.6	%					264,229						48.5	%					224,970						46.6	%
				$	629,433						100.0	%				$	545,149						100.0	%				$	482,905						100.0	%

With the exception of the Company’s Lejaby operation (which business has been classified as a discontinued operation for reporting purposes), the Company’s Intimate Apparel Group’s products are sourced entirely from third parties.

Swimwear Group

The Swimwear Group designs, sources and markets moderate to premium priced swimwear, swim accessories and related products and sub-licenses the Speedo label to suppliers of apparel and other products in widely diversified channels of distribution. On September 18, 2007, the Company announced its intention to exit the Swimwear Group’s private label and designer swimwear businesses (except Calvin Klein swimwear) and in September 2007, pursuant to this initiative, the Company disposed of its OP women’s and junior swimwear business. In addition, on December 28, 2007, the Company entered into an asset purchase agreement with InMocean whereby the Company sold its Catalina , Anne Cole and Cole of California businesses. As a result of the above transactions, the Company’s OP women’s and juniors’, Catalina , Anne Cole and Cole of California swimwear businesses have been classified as discontinued operations as of December 29, 2007. The Company’s Nautica , Michael Kors and private label swimwear businesses will be classified as discontinued operations when the operations of these businesses have ceased (which is expected to occur by the end of June 2008). See ‘‘— Acquisitions, Dispositions and Discontinued Operations—Dispositions and Discontinued Operations.’’ Net revenues of the Swimwear Group accounted for 15.7% of the Company’s net revenues in Fiscal 2007.

The following table sets forth the Swimwear Group’s significant brand names and their apparel price ranges and types:

Brand Name			Price Range			Type of Apparel
Speedo			Moderate to premium			Men’s and women’s competitive swimwear, competitive and non-competitive swim accessories, men’s swimwear and coordinating T-shirts, women’s fitness swimwear, fashion swimwear, footwear and children’s swimwear
Calvin Klein			Better to premium			Men’s and women’s swimwear
Lifeguard			Upper moderate to better			Men’s and women’s swimwear and related products
Nautica (a)			Upper moderate to better			Women’s swimwear, beachwear and accessories
Michael Kors (a)			Better to premium			Women’s swimwear
Private Label (a)			Moderate			Women’s and juniors’ swimwear

12

The Company believes that Speedo is the pre-eminent competitive swimwear brand in the world. Innovations by the Swimwear Group and its licensor, SIL, have led and continue to lead the competitive swimwear industry. For example, in March 2004, Speedo introduced a new generation of its Fastskin suit (the ‘‘FS II’’), developed by the Swimwear Group and SIL. Based on data compiled by the Company’s Swimwear Group, the Company believes that over 67% of the total U.S. swimming medal winners at the 2004 Summer Olympic Games in Athens raced in Speedo suits. On February 15, 2007, the Company and its licensor, SIL, introduced another generation of the Fastskin suit (the ‘‘FS-PRO’’). Since inception of the FS-PRO, 24 world records have been set by athletes who have competed in FS-PRO. On February 12, 2008, the Company launched its new Speedo LZR RACER ^® (the ‘‘LZR’’). The Company will debut the new suit at national trials in March 2008 and expects the world’s top swimmers to compete in the suit at the 2008 Summer Olympics in Beijing, China. Speedo competitive swimwear is primarily distributed through sporting goods stores, team dealers, swim specialty shops and the Company’s ‘‘SpeedoUSA.com’’ internet website. Speedo competitive swimwear accounted for approximately 16.6% of the Swimwear Group’s net revenues in Fiscal 2007.

The Company capitalizes on the competitive Speedo image in marketing its Speedo brand fitness and fashion swimwear by incorporating performance elements in the Company’s more fashion-oriented products. Speedo fitness and fashion swimwear and Speedo swimwear for children are distributed in the U.S., Mexico, Canada and the Caribbean through department and specialty stores, independent retailers, chain stores, sporting goods stores, team dealers, catalog retailers, membership clubs and the Company’s ‘‘ SpeedoUSA.com ’’ internet website. Speedo fashion swimwear and related products accounted for approximately 25.4% of the Swimwear Group’s net revenues in Fiscal 2007.

Speedo accessories, including swim goggles, water-based fitness products, water toys, electronics and other swim and fitness-related products for adults and children, are primarily distributed through sporting goods stores, chain stores, swim specialty shops, membership clubs and mass merchandisers. Speedo accessories accounted for approximately $71.0 million of net revenues in Fiscal 2007, or approximately 24.3% of the Swimwear Group’s net revenues. Swimwear Group’s net revenues also included $25.7 million (8.8% of the Swimwear Group’s net revenues) from the sale of Speedo footwear products.

The Company designs, sources and sells a broad range of Calvin Klein fashion swimwear and beachwear for men and women. Calvin Klein swimwear is distributed through department stores and independent retailers in the U.S., Mexico, Canada and Europe. Calvin Klein swimwear accounted for approximately 6.0% of the Swimwear Group’s net revenues in Fiscal 2007.

13

The following table sets forth the Swimwear Group’s principal distribution channels and certain major customers:

Channels of Distribution			Customers			Brands
United States
Department Stores			Federated Department Stores			Speedo swimwear and accessories, Calvin Klein swimwear, Nautica (a) and Michael Kors (a)
Independent Retailers			Nordstrom, Dillard’s and Belk			Speedo swimwear, Calvin Klein swimwear
Chain Stores			J. C. Penney, Kohl’s and Sears			Speedo swimwear and accessories, Designer and private label (a)
Membership Clubs			Costco and Sam’s Club			Speedo swimwear, active apparel and accessories
Mass Merchandisers			Target			Private label (a) and Speedo accessories
Other			Military, Victoria’s Secret Catalog and The Sports Authority, team dealers			Speedo swimwear and accessories, Lifeguard, Nautica (a) and private label (a)
Canada			Hudson Bay Company and Sears Costco and Sam’s Clubs			Speedo swimwear and accessories, Calvin Klein and Nautica (a) Speedo swimwear and accessories
Mexico, Central and South America			Liverpool, Palacio De Hierro, Marti, Wal-Mart and Costco			Speedo swimwear and accessories, Calvin Klein and Nautica (a) Speedo swimwear and accessories
Europe			EL Corte Ingles, House of Fraiser, La Rinascente and Company-owned stores/stores operated under distributor agreements			Calvin Klein swimwear

The Swimwear Group generally markets its products for three retail selling seasons (Cruise, Spring and Summer). New styles, fabrics and colors are introduced based upon consumer preferences and market trends and coincide with the appropriate selling season. The swimwear business is seasonal. Approximately 70.9%, 65.2% and 66.0% of the Swimwear Group’s net revenues were recorded in the first halves of Fiscal 2007, Fiscal 2006 and Fiscal 2005, respectively.

The Swimwear Group has operations in the U.S., Mexico, Canada and Europe. During Fiscal 2007, the Company transferred the ownership of its Mexican manufacturing facilities to a local business operator and closed its swim goggle manufacturing facility in Canada. All of the Swimwear Group’s products are sourced from third-party contractors primarily in the U.S., Mexico, Europe and Asia.

14

The following table sets forth the domestic and international net revenues of the Swimwear Group:

			Fiscal 2007			Fiscal 2006			Fiscal 2005
			Net Revenues			% of Total			Net Revenues			% of Total			Net Revenues			% of Total
									(in thousands of dollars)
Net revenues:
United States				$	251,763						86.4	%				$	289,120						90.8	%				$	281,378						91.9	%
International					39,777						13.6	%					29,365						9.2	%					24,639						8.1	%
				$	291,540						100.0	%				$	318,485						100.0	%				$	306,017						100.0	%

Customers

The Company’s products are widely distributed to department and specialty stores, independent retailers, chain stores and membership clubs in North America, Asia and Europe. No single customer accounted for more than 8% of the Company’s net revenue in Fiscal 2007. No single customer accounted for more than 10% of the Company’s net revenues in Fiscal 2006. One customer, Federated Department Stores, accounted for approximately 12.3% of the Company’s net revenues in Fiscal 2005. No other customer accounted for more than 10% of the Company’s net revenues in Fiscal 2005.

The Company offers a diversified portfolio of brands across virtually all distribution channels to a wide range of customers. The Company utilizes focus groups, market research and in-house and licensor design staffs to align its brands with the preferences of consumers. The Company believes that this strategy reduces its reliance on any single distribution channel and allows it to market products with designs and features that appeal to a wide range of consumers at varying price points.

Advertising, Marketing, and Promotion

The Company devotes significant resources to advertising and promoting its various brands to increase awareness of its products with retail consumers and, consequently, to increase consumer demand.

Total advertising, marketing and promotion expense (including cooperative advertising programs whereby the Company reimburses customers for a portion of the cost incurred by the customer in placing advertisements featuring its products) was $101.0 million, $91.7 million and $71.2 million for Fiscal 2007, 2006 and 2005, respectively. The Company focuses its advertising and promotional spending on brand and/or product-specific advertising, primarily through point of sale product displays, visuals, individual in-store promotions and magazine and other print publications. In addition, the Swimwear Group sponsors a number of world-class swimmers, divers and volleyball players who wear its products in competition and participate in various promotional activities on behalf of the Speedo brand. The Company’s Swimwear Group expects to incur approximately $5.0 million of incremental marketing expenses in Fiscal 2008 primarily related to programs associated with the Summer Olympics in Beijing, China which are scheduled for August 2008.

The Company’s licenses for the Calvin Klein and Chaps trademarks include provisions requiring the Company to spend a specified percentage (ranging from 1% to 3%) of revenues on advertising and promotion related to the licensed products. The Company also benefits from general advertising campaigns conducted by its licensors. Though some of these advertising campaigns do not focus specifically on the Company’s licensed products and often include the products of other licensees in addition to its own, the Company believes it benefits from the general brand recognition that these campaigns generate.

Sales

The Company’s wholesale customers are served by sales representatives who are generally assigned to specific brands and products. In addition, the Company has customer service departments for each business unit that assist the Company’s sales representatives and customers in tracking goods available for sale, determining order and shipping lead times and tracking the status of open orders.

15

The Company utilizes Electronic Data Interchange programs (‘‘EDI’’) wherever possible, which permit it to receive purchase orders electronically from customers and, in some cases, to transmit invoices electronically to customers. EDI helps the Company ensure that its customers receive its products in a timely and efficient manner.

Distribution

As of December 29, 2007, the Company distributed its products to its wholesale customers and retail stores from various distribution facilities and distribution contractors located in the U.S. (five facilities), Canada (one facility), Mexico (one facility), China (one facility), France (one facility), Hong Kong (three facilities), Italy (two facilities), Korea (two facilities), Australia (one facility) and the Netherlands (one facility). Several of the Company’s facilities are shared by more than one of its business units and/or operating segments. The Company owns one, leases nine and uses third-party services for eight of its distribution facilities.

Raw Materials and Sourcing

The Company’s products are comprised of raw materials which consist principally of cotton, wool, silk, synthetic and cotton-synthetic blends of fabrics and yarns. Raw materials are generally available from multiple sources. Historically, neither the Company, nor, to the Company’s knowledge, any of its third-party contractors, have experienced any significant shortage of raw materials.

Substantially all of the Company’s products sold in North America and Europe are imported and are subject to various customs laws. See ‘‘— Government Regulations.’’     The Company seeks to maintain a balanced portfolio of sourcing countries and factories worldwide to ensure continuity in supply of product. Quotas are monitored closely and contingencies activated when necessary.

Following the pending sale of its Lejaby business, all of the Company’s products will be produced by third party suppliers. Sourcing from third-party manufacturers allows the Company to maximize production flexibility while avoiding significant capital expenditures, work-in-process inventory buildups and the costs of managing a large production work force. The Company regularly inspects products manufactured by its suppliers to seek to ensure that they meet the Company’s quality and production standards.

The Company monitors all of its contracted production facilities to ensure their continued human rights and labor compliance and adherence to all applicable laws and the Company’s own business partner manufacturing guidelines. All of the Company’s contractors are required, by the terms of such contractor’s agreement with the Company, to adhere to the Company’s business partner manufacturing guidelines. All suppliers are required to execute an acknowledgment confirming their obligation to comply with the Company’s guidelines. All purchase orders and letters of credit contain similar contractual requirements. Company personnel regularly conduct on-site visits to monitor a contractor’s working environment.

In addition, the Company has engaged third-party labor compliance auditing companies to monitor its facilities and those of its contractors. These auditing companies periodically audit all the Company’s foreign and domestic contractors’ payroll records, age certificates, compliance with local labor laws, security procedures and compliance with the Company’s business partner manufacturing guidelines. These auditing companies also conduct unannounced visits, surveillance and random interviews with contractors, employees and supervisors.

Trademarks and Licensing Agreements

The Company owns and licenses a portfolio of highly recognized brand names. Most of the trademarks used by the Company are either owned, licensed in perpetuity or, in the case of Calvin Klein Jeans, licensed for terms extending through 2044 (in the U.S.) and 2046 (in Europe and Asia). The Company’s Core Brands (as defined below) have been established in their respective markets for extended periods and have attained a high level of consumer awareness. The Speedo brand has been in existence for 80 years, and the Company believes Speedo is the dominant competitive swimwear

16

brand in the United States. The Warner’s and Olga brands have been in existence for 135 and 68 years, respectively, and Calvin Klein and Chaps have each been in existence for more than 25 years.

The Company regards its intellectual property in general and, in particular, its owned trademarks and licenses, as its most valuable assets. The Company believes the trademarks and licenses have substantial value in the marketing of its products. The Company has protected its trademarks by registering them with the U.S. Patent and Trademark Office and with governmental agencies in other countries where its products are manufactured and sold. The Company works vigorously to enforce and protect its trademark rights by engaging in regular market reviews, helping local law enforcement authorities detect and prosecute counterfeiters, issuing cease-and-desist letters against third parties infringing or denigrating its trademarks and initiating litigation as necessary. The Company also works with trade groups and industry participants seeking to strengthen laws relating to the protection of intellectual property rights in markets around the world.

Although the specific terms of each of the Company’s license agreements vary, generally the agreements provide for minimum royalty payments and/or royalty payments based on a percentage of net sales. The license agreements generally also grant the licensor the right to approve any designs marketed by the Company.

Intimate Apparel Group

All of the Calvin Klein trademarks (including all variations and formatives thereof) for all products and services are owned by the Calvin Klein Trademark Trust. The trust is co-owned by CKI, and the Company. The Class B and C Series Estates of the trust correspond to the Calvin Klein trademarks for men’s, women’s and children’s underwear, intimate apparel and sleepwear and are owned by the Company. Accordingly, as owner of the Class B and C Estate Shares of the trust corresponding to these product categories, the Company is the beneficial owner of the Calvin Klein trademarks for men’s, women’s and children’s underwear, intimate apparel, loungewear and sleepwear throughout the entire world.

Sportswear Group

The Company has a license to develop, manufacture and market designer jeanswear products under the Calvin Klein trademark in North, South and Central America. In July 2004, the Company acquired the license to open retail stores to sell jeanswear and ancillary products bearing the Calvin Klein marks in Central and South America. In addition, in connection with the CKJEA Acquisition, the Company expanded the territory covered by the retail stores license to include Mexico and Canada. The initial terms of these licenses expire on December 31, 2034 and are extendable by the Company for a further ten-year term expiring on December 31, 2044 if the Company achieves certain sales targets in the U.S., Mexico and Canada. In January 2006, the Company acquired certain Calvin Klein accessories licenses as part of the CKJEA Acquisition (as discussed below and in ‘‘— Acquisitions, Dispositions and Discontinued Operations—CKJEA Acquisition ’’).

In January 2006, the Company acquired the companies that operate the license and related wholesale and retail businesses of Calvin Klein Jeans and accessories in Europe and Asia and the CK Calvin Klein ‘‘bridge’’ line of sportswear and accessories in Europe. See ‘‘— Acquisitions, Dispositions and Discontinued Operations — CKJEA Acquisition. ’’ In connection with the acquisition, the Company acquired various exclusive license agreements and entered into amendments to certain of its existing license agreements with CKI (in its capacity as licensor). Under these agreements the Company has licenses to develop, manufacture, distribute and market, and to open retail stores to sell, ‘‘bridge’’ apparel and accessories under the CK/Calvin Klein trademark and service mark in Europe (countries constituting European Union at May 1, 2004), Norway, Switzerland, Monte Carlo, Vatican City, Liechtenstein, Iceland and parts of Eastern Europe, Russia, the Middle East and Africa. These licenses extend through December 31, 2046, provided the Company achieves certain minimum sales targets.

In connection with the CKJEA Acquisition, the Company acquired the licenses to develop, manufacture, distribute and market, and to open retail stores to sell, jeans apparel and accessories

17

under the Calvin Klein and/or CK/Calvin Klein trademark and service mark in the forms of the logos Calvin Klein Jeans and/or CK/Calvin Klein Jeans in Japan, China, South Korea and ‘‘Rest of Asia’’ (Hong Kong, Thailand, Australia, New Zealand, Philippines, Taiwan, Singapore, Malaysia, Indonesia, New Guinea, Vietnam, Cambodia, Laos, Myanmar, Macau and the Federated State of Micronesia) and parts of Western Europe, the Middle East, Egypt, Eastern Europe and Southern Africa. These licenses also extend through December 31, 2046, provided the Company achieves certain minimum sales targets.

In January 2008, the Company expanded its relationship with CKI through several new long-term licenses (and amendments to existing long-term licenses), pursuant to which the Company acquired the rights to: (i) use the CK/Calvin Klein trademark in connection with operating free-standing retail stores (including both full price and outlet stores) in Europe and in Central and South America (excluding Mexico) for the sale of ‘‘bridge accessories;’’ (ii) use the CK/Calvin Klein trademark in connection with operating free-standing retail stores (including both full price and outlet stores) in Europe and in Central and South America (excluding Mexico) for the sale of ‘‘jeans accessories;’’ and (iii) allow the Company to develop independent and/or common internet sites for the sale to consumers of jeanswear apparel and jeanswear accessories in North America, Europe and Asia.

Also in January 2008, the Company and CKI agreed that CKI would facilitate discussions between the Company and Windsong Golf LLC (‘‘Windsong’’) with respect to golf apparel products and make certain other arrangements to allow the Company to be a sub-licensee and preferred distributor of Windsong for such golf apparel products in the Republic of Korea (South Korea), Hong Kong, China (PRC), Japan, Taiwan, Indonesia, Philippines, and elsewhere in Asia. Accordingly, subject to Windsong’s agreement and to CKI’s review and approval of the terms of sublicense and distributorship, it is intended that the Company and Windsong will: (a) enter into a Sublicense Agreement, pursuant to which Windsong will grant to the Company the exclusive right to act as a sub-licensee for Calvin Klein Golf apparel for the purposes of sourcing and selling such products to department and specialty stores in Asia; and (b) enter into a Distribution Agreement, pursuant to which Windsong will grant to the Company the exclusive right to distribute Calvin Klein Golf apparel to ‘‘green grass’’ locations and department and specialty stores in the licensed territories. Both agreements are to extend through December 31, 2012, which period may be extended for two additional consecutive five year periods at the Company’s election provided that certain conditions are met for each renewal period.

The Company has the exclusive right to use the Chaps trademark for men’s sportswear, jeanswear, activewear, sports shirts and swimwear in the U.S. and its territories and possessions, including Puerto Rico, Mexico and Canada and has rights of first refusal with respect to Europe. The license extends through December 31, 2008, subject to the Company’s right to renew for two additional five-year terms beyond the expiration date up to and including December 31, 2018, provided that the Company has achieved certain levels of minimum earned royalties. On February 1, 2008, the Company informed the licensor that it intends to exercise the first of its two five-year renewal options. Pursuant to the terms of the license, the Company expects to pay approximately $2.0 million associated with the renewal of this license.

Swimwear Group

The Company has license agreements in perpetuity with SIL which permit the Company to design, manufacture and market certain men’s, women’s and children’s apparel, including swimwear, sportswear and a wide variety of other products, using the Speedo trademark and certain other trademarks. The Company’s license to use Speedo and other trademarks was granted in perpetuity subject to certain conditions and is exclusive in the U.S. and its territories and possessions, Canada, Mexico and the Caribbean. The license agreements provide for minimum royalty payments to be credited against future royalty payments based on a percentage of net sales. The license agreements may be terminated with respect to a particular territory in the event the Company does not pay royalties or abandons the trademark in such territory. Moreover, the license agreements may be terminated in the event the Company manufactures, or is controlled by a company that manufactures, racing/competitive swimwear, swimwear caps or swimwear accessories under a different trademark, as

18

specifically defined in the license agreements. The Company generally may sublicense the Speedo trademark within the geographic regions covered by the licenses. SIL retains the right to use or license the Speedo trademark in other jurisdictions and actively uses or licenses the Speedo trademark throughout the world outside of the Company’s licensed territory.

The Company also has a license to develop, manufacture and market women’s and juniors’ swimwear under the Calvin Klein and CK Calvin Klein trademarks in the approved forms as designated by the licensor worldwide and men’s swimwear under the Calvin Klein mark in the form designated by the licensor in Europe (countries constituting European Union at May 1, 2004), Norway, Switzerland, United Arab Emirates, Saudi Arabia, Kuwait, Lebanon, Jordan, the West Bank, Egypt, Israel and Russia. The initial terms of these licenses expire on December 31, 2009 and are extendable by the Company for a further 5-year term expiring on December 31, 2014 if the Company achieves certain sales targets. In May 2005, the Company acquired from the former licensee (with the consent of the licensor) the right to develop, manufacture and market women’s and juniors’ swimwear under the Calvin Klein and CK Calvin Klein trademarks in the approved forms as designated by the licensor in the U.S., Mexico and Canada.

In July 1995, the Company entered into a license agreement with Lifeguard Licensing Corp. Under the license agreement, the Company has the exclusive right to manufacture, source, sublicense, distribute, promote and advertise Lifeguard apparel worldwide. In September 2003, the Lifeguard license was amended and extended to add other product categories, namely accessories and sporting equipment. The current term of the license agreement expires on June 30, 2010. The agreement includes four renewal options, each of which permits the Company to extend for an additional five-year term (through June 30, 2030) subject to compliance with certain conditions.

In March 2003, the Company entered into an exclusive license agreement to manufacture, distribute and sell Nautica women’s swimwear and related products in the U.S., Canada, Mexico and the Caribbean Islands for an initial term of four years. The license agreement was renewable at the Company’s option for two additional years to June 30, 2009 if it achieved certain sales targets. In February 2006, the Nautica license agreement was amended to expand the licensed territories with respect to certain product lines. The Company has informed the licensor that it intends to exit this business by the end of June 2008. See ‘‘— Acquisitions, Dispositions and Discontinued Operations .’’

In June 2004, the Company entered into a license agreement with Michael Kors, L.L.C. The Company has the worldwide (excluding Japan) right to manufacture and distribute Michael Kors and MICHAEL Michael Kors swimwear products in the designer collection market segment and in the better market segment. The current term of the license agreement expires on June 30, 2008. The Company does not intend to renew this license.

On December 26, 2007, the Company sold assets of the businesses related to the marks ‘‘Anne Cole’’, ‘‘Cole of California’’ and ‘‘Catalina’’, and assigned and transferred all of its ownership rights in the Cole of California and Catalina marks, and its licensed rights under the Anne Cole mark, as part of this sale. See ‘‘— Acquisitions, Dispositions and Discontinued Operations—Dispositions and Discontinued Operations .’’

On November 6, 2006, the Company sold its OP business (part of the Company’s Swimwear Group) including the associated trademarks and goodwill to Iconix for a total consideration of $54 million. In connection with the sale, the Company had been granted a license to design, source, manufacture, promote, distribute and sell juniors’ and women’s swimwear products bearing the Op , Ocean Pacific and Seven2 ^® names and marks for an initial term of three years. On September 28, 2007, the Company and Iconix agreed to terminate the license agreement. In connection with the termination of the license agreement, the Company agreed to pay Iconix a one time payment in the amount of $1.8 million in full satisfaction of all of the Company’s payment and other obligations under the license agreement.

On an ongoing basis, the Company evaluates entering into distribution or license agreements with other companies that would permit those companies to market products under the Company’s

19

trademarks. In evaluating a potential distributor or licensee, the Company generally considers the experience, financial stability, manufacturing performance and marketing ability of the proposed licensee.

Certain of the Company’s license agreements with third parties will expire by their terms over the next several years. There can be no assurance that the Company will be able to negotiate and conclude extensions of such agreements on similar economic terms or at all.

International Operations

In addition to its operations in the U.S., the Company has operations in Canada, Mexico, Central and South America, Europe (Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain, Switzerland, the United Kingdom and Ireland), Asia (Hong Kong, Singapore, China, Taiwan, Korea and Macau) and Australia. The Company’s products are sold in over 100 countries worldwide. Each of the Company’s international operations engage in sales, sourcing, distribution and/or marketing activities. International operations generated $898.4 million, or 48.3% of the Company’s net revenues in Fiscal 2007, compared with $682.2 million, or 41.2% of net revenues, in Fiscal 2006 and $326.6 million, or 25.1% of net revenues, in Fiscal 2005. International operations generated operating income of $142.5 million, $97.3 million and $64.1 million (representing 81.4%, 62.1% and 51.1% respectively, of the operating income generated by the Company’s business groups) in Fiscal 2007, Fiscal 2006 and Fiscal 2005, respectively.

The Company has many potential sources of supply and believes a disruption at any one facility would not have a material adverse effect on the Company. The Company maintains insurance policies designed to substantially mitigate the financial effects of disruptions in its sources of supply.

The movement of foreign currency exchange rates affects the Company’s results of operations. For further discussion of certain of the risks involved in the Company’s foreign operations, including foreign currency exposure, see Item 1A. Risk Factors .

Competition

The apparel industry is highly competitive. The Company competes with many domestic and foreign apparel suppliers, some of which are larger and more diversified and have greater financial and other resources than the Company. In addition to competition from other apparel suppliers, the Company competes in certain product lines with department stores, mass merchandisers and specialty store private label programs.

The Company offers a diversified portfolio of brands across a wide range of price points in many channels of distribution in an effort to appeal to all consumers. The Company competes on the basis of product design, quality, brand recognition, price, product differentiation, marketing and advertising, customer service and other factors. Although some of its competitors have greater sales, the Company does not believe that any single competitor dominates any channel in which the Company operates. The Company believes that its ability to serve multiple distribution channels with a diversified portfolio of products under widely recognized brand names distinguishes it from many of its competitors. See Item 1A . Risk Factors .

Government Regulations

The Company is subject to federal, state and local laws and regulations affecting its business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission and various environmental laws and regulations. The Company’s international businesses are subject to similar regulations in the countries where they operate. The Company believes that it is in compliance in all material respects with all applicable governmental regulations.

The Company’s operations are also subject to various international trade agreements and regulations such as the North American Free Trade Agreement, the Central American Free Trade

20

Agreement, the Africa Growth & Opportunity Act, the Israel & Jordan Free Trade Agreements, the Andean Agreement, the Caribbean Basin Trade Partnership Act and the activities and regulations of the World Trade Organization (‘‘WTO’’). The Company believes that these trade agreements generally benefit the Company’s business by reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular country; however, the elimination of quotas with respect to certain countries could adversely affect the Company as a result of increased competition from such countries. See Item 1A. Risk Factors . In addition, trade agreements can also impose requirements that negatively affect the Company’s business, such as limiting the countries from which it can purchase raw materials and setting quotas on products that may be imported from a particular country. On January 1, 2005, in accordance with its commitments under the WTO, the U.S. discontinued imposing quotas on the import of apparel from WTO members. In response to import surges in key categories and to develop a stable and predictable trading environment, the U.S. and China entered into a three year memorandum of understanding (‘‘MOU’’) in November 2005. The MOU essentially imposes quotas on key apparel categories manufactured in China and exported on or after January 2006 through December 2008. The Company monitors trade-related matters pending with the U.S. government for potential positive or negative effects on its operations.

Employees

As of December 29, 2007, the Company employed 4,656 employees (inclusive of 723 employees related to the Company’s Lejaby business which business was sold in February 2008). As of December 29, 2007, excluding the Lejaby business, approximately 18% of the Company’s employees were either represented by labor unions or covered by collective bargaining agreements. The Company considers labor relations with its employees to be satisfactory and has not experienced any significant interruption of its operations due to labor disagreements.

Backlog

As relates to its continuing operations, the Company’s Swimwear Group (due to the seasonal nature of its operations) had unfilled customer orders (consisting of both confirmed and unconfirmed orders) of approximately $133.8 million as of December 29, 2007 and $145.8 million as of December 30, 2006. A substantial portion of net revenues of the Company’s other businesses is based on orders for immediate delivery and, therefore, backlog is not necessarily indicative of future net revenues.

Asset Sales

During the third quarter of Fiscal 2007, the Company disposed of its OP women’s and junior swimwear business. During the fourth quarter of Fiscal 2007, the Company sold its Catalina, Anne Cole and Cole of California businesses and disposed of its swimwear manufacturing operation located in Mexico. In Fiscal 2006 the Company disposed of its OP business. See ‘‘— Acquisitions, Dispositions and Discontinued Operations ’’ and Note 3 of Notes to Consolidated Financial Statements for a complete discussion of these dispositions.

21

Executive Officers of the Registrant

The executive officers of the Company, their age and their position as of February 15, 2008 are set forth below:

Name			Age			Position
Joseph R. Gromek					61				Director, President and Chief Executive Officer
Lawrence R. Rutkowski					49				Executive Vice President and Chief Financial Officer
Helen McCluskey					52				President—Intimate Apparel Group
Frank Tworecke					61				President—Sportswear Group
Dwight Meyer					55				President—Global Sourcing, Distribution and Logistics
Stanley P. Silverstein					55				Executive Vice President—International Strategy and Business Development
Elizabeth Wood					46				Senior Vice President—Human Resources
Jay A. Galluzzo					33				Senior Vice President, General Counsel and Secretary (a)

Mr. Gromek has served as the Company’s President and Chief Executive Officer since April 2003, at which time he was also elected to the Board of Directors. From 1996 to January 2002, Mr. Gromek served as President and Chief Executive Officer of Brooks Brothers, Inc. From January 2002 until he joined the Company in April 2003, Mr. Gromek worked as an independent consultant. Over the last 25 years, Mr. Gromek has held senior management positions with Saks Fifth Avenue, Limited Brands, Inc. and AnnTaylor Stores Corporation. Mr. Gromek is the Chairman of the Board of Directors of Volunteers of America and a member of the Board of Governors of the Parsons School of Design.

Mr. Rutkowski currently serves as the Company’s Executive Vice President and Chief Financial Officer. From September 2003 until March 2005, Mr. Rutkowski served as the Company’s Senior Vice President and Chief Financial Officer. From December 1999 to June 2003, he served as Executive Vice President and Chief Financial Officer at Primedia, Inc., a targeted media company. From November 1993 to December 1999, he served at National Broadcasting Company/General Electric as Senior Vice President and Chief Financial Officer Strategic Business Development and Controller of Corporate Finance. Previously, Mr. Rutkowski held a senior management position at Walt Disney Studios.

Ms. McCluskey joined the Company in July 2004 as Group President-Intimate Apparel and in June 2007, also assumed global responsibility for the Company’s Swimwear brands. She is responsible for all aspects of the Company’s intimate apparel and swimwear brands including Calvin Klein underwear and swimwear, Warner’s , Olga , Body Nancy Ganz and Speedo . Prior to joining the Company, Ms. McCluskey served as Group President of the Moderate Women’s Sportswear division of Liz Claiborne Corporation from August 2001 to June 2004. Previously, she spent 18 years at Sara Lee Corporation’s intimate apparel units where she held executive positions in marketing, operations and general management, including President of Playtex Apparel from 1999 to 2001.

Mr. Tworecke joined the Company as Group President-Sportswear in May 2004. From 1999 to April 2004, Mr. Tworecke served as President and Chief Operating Officer of Bon-Ton Stores, a department store operator. Previously, he was President and Chief Operating Officer of Jos. A. Bank. Mr. Tworecke has also held senior management positions with other specialty and department store retailers including MGR, Inc., Rich’s Lazarus Goldsmith (now known as the Macy’s Central division of Federated Department Stores), and John Wanamaker.

Mr. Meyer currently serves as the Company’s President-Global Sourcing, Distribution and Logistics. Mr. Meyer is responsible for all aspects of the Company’s worldwide sourcing, distribution and logistics operations. From April 2005 until March 2007, Mr. Meyer served as the Company’s President-Global Sourcing. Prior to joining the Company, Mr. Meyer served as Executive Vice President of Global Sourcing of AnnTaylor Stores Corporation, a specialty clothing retailer of

22

women’s apparel, shoes and accessories, from 1996 until April 2005. Previously, he served as President and Chief Operating Officer of C.A.T. (a joint venture between AnnTaylor Stores Corporation and Cygne Design) and Vice President, Sourcing for the Abercrombie & Fitch division of M.A.S.T. Industries.

Mr. Silverstein currently serves as the Company’s Executive Vice President-International Strategy and Business Development. From March 2005 until January 2006, Mr. Silverstein served as the Company’s Executive Vice President-Corporate Development. From March 2003 to March 2005, Mr. Silverstein served as the Company’s Senior Vice President-Corporate Development and served as the Company’s Chief Administrative Officer from December 2001 until January 2006. Mr. Silverstein served as the Company’s Vice President and General Counsel from December 1990 until February 2003 and as its Secretary from January 1987 until May 2003. In May 2004, Mr. Silverstein, without admitting or denying the findings, entered into a settlement with the Securities and Exchange Commission (‘‘SEC’’) pursuant to which the SEC found that Mr. Silverstein had willfully aided and abetted and caused certain violations by the Company of the federal securities laws and issued an administrative order requiring that Mr. Silverstein cease and desist from causing any violations and any future violations of such laws. The order, which did not impose any fines or monetary penalties on Mr. Silverstein, censured him pursuant to the SEC’s Rules of Practice and required that he disgorge certain incentive compensation for 1998, with interest. In addition, the order provided that until May 11, 2006, Mr. Silverstein not sign documents to be filed with the SEC by or on behalf of the Company or participate in or be responsible for the preparation or review of such filings, except under limited circumstances.

Ms. Wood joined the Company as Senior Vice President-Human Resources in September 2005. From May 2002 to August 2005, Ms. Wood served as a consultant for Breakthrough Group, a consulting company that focuses on executive and employee training and development. From May 1996 to February 2002, Ms. Wood served as the Executive Vice President of Human Resources of Brooks Brothers, Inc. Previously, Ms. Wood served as Corporate Human Resources Director of Marks and Spencer Group, plc.

Mr. Galluzzo currently serves as the Company’s Senior Vice President-Corporate Development, General Counsel and Secretary. From March 2005 until March 2007, Mr. Galluzzo served as the Company’s Senior Vice President, General Counsel and Secretary. From March 2003 to March 2005, Mr. Galluzzo served as the Company’s Vice President and General Counsel and has served as the Company’s Secretary since May 2003. Mr. Galluzzo was associated with the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from October 2000 to March 2003. Mr. Galluzzo has given the Company notice of his resignation, effective March 17, 2008, in order to pursue a new employment opportunity.

Proceedings Under Chapter 11 of the Bankruptcy Code

On June 11, 2001, the Company and certain of its subsidiaries (each a ‘‘Debtor’’ and, collectively, the ‘‘Debtors’’) each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code, 11 U.S.C. §§101-1330, as amended (the ‘‘Bankruptcy Code’’), in the United States Bankruptcy Court for the Southern District of New York (the ‘‘Bankruptcy Court’’) (collectively, the ‘‘Chapter 11 Cases’’). Warnaco, 36 of its 37 U.S. subsidiaries and one of the Company’s Canadian subsidiaries, Warnaco of Canada Company, were Debtors in the Chapter 11 Cases. The remainder of the Company’s foreign subsidiaries were not Debtors in the Chapter 11 Cases, nor were they subject to foreign bankruptcy or insolvency proceedings.

On November 9, 2002, the Debtors filed the First Amended Joint Plan of Reorganization of The Warnaco Group, Inc. and Its Affiliated Debtors and Debtors-In-Possession Under Chapter 11 of the Bankruptcy Code (the ‘‘Reorganization Plan’’). On January 16, 2003, the Bankruptcy Court entered (i) its Findings of Fact to and Conclusions of Law Re: Order and Judgment Confirming The First Amended Joint Plan of Reorganization of The Warnaco Group, Inc. and Its Affiliated Debtors and Debtors-In-Possession Under Chapter 11 of Title 11 of the United States Code, dated November 8, 2002, and (ii) an Order and Judgment Confirming The First Amended Joint Plan of

23

Reorganization of The Warnaco Group, Inc. and Its Affiliated Debtors and Debtors-In-Possession Under Chapter 11 of Title 11 of the United States Code, dated November 8, 2002, and Granting Related Relief (the ‘‘Confirmation Order’’). In accordance with the provisions of the Reorganization Plan and the Confirmation Order, the Reorganization Plan became effective on February 4, 2003 (the ‘‘Effective Date’’).

Website Access to Reports

The Company’s internet website is http://www.warnaco.com . The Company makes available free of charge on its website (under the heading ‘‘SEC Filings’’) its SEC filings, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. The Company’s website address is provided as an inactive textual reference only. The information provided on the Company’s website is not part of this Annual Report on Form 10-K, and is not incorporated by reference.

Additional information required by this Item 1 of Part I is incorporated by reference to Note 5 of Notes to Consolidated Financial Statements .