<PAGE>


<PAGE>


                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                   For the fiscal year ended January 31, 1999

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from_________________to___________________

       Commission file number 0-18183

                            G-III APPAREL GROUP, LTD.
                            -------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                             <C>

                Delaware                                41-1590959
                --------                                -----------
    (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                  Identification No.)

512 Seventh Avenue, New York, New York                10018
- --------------------------------------               ------
(Address of principal executive offices)             (Zip Code)
</TABLE>


Registrant's telephone number, including area code: (212) 403-0500

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

Securities registered pursuant to Section 12(g) of the Act:  Common Stock,
$.01 par value.

         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 the Form 10-K or any
amendment to this Form 10-K. [ ]

         As of March 31, 1999, the aggregate market value of the registrant's
voting stock held by non-affiliates of the registrant (based on the last sale
price for such shares as quoted by the Nasdaq National Market) was $7,776,083.

         The number of outstanding shares of the registrant's Common Stock as of
March 31, 1999 was 6,717,921.

         Documents incorporated by reference: Certain portions of the
registrant's definitive Proxy Statement relating to the registrant's Annual
Meeting of Stockholders to be held on or about June 17, 1999, to be filed
pursuant to Regulation 14A of the Securities Exchange Act of 1934 with the
Securities and Exchange Commission, are incorporated by reference into Part III
of this Report.








<PAGE>


<PAGE>




ITEM 1.           BUSINESS

OVERVIEW

                  G-III Apparel Group, Ltd. (the "Company") designs,
manufactures, imports and markets an extensive range of leather and non-leather
apparel including coats, jackets, pants, skirts and other sportswear items under
its "G-III"'TM', "Siena"'TM', "Siena Studio"'TM', "Colebrook and Co."'TM'
labels, and under licensed and private retail labels. The Company commenced
operations in 1974, initially selling moderately priced women's leather coats
and jackets under its G-III label. The Company has continuously expanded its
product lines and began selling higher priced, more fashion oriented women's
leather apparel under its Siena and "Cayenne"'TM' (now called Siena Studio)
labels in 1981 and 1988, respectively. In 1988, the Company introduced a line
of men's leather apparel, presently consisting primarily of jackets and coats
sold under the G-III and Colebrook labels. In 1990, the Company formed a textile
division, which designs, imports and markets a moderately priced line of women's
textile outerwear and sportswear under the J.L. Colebrook (now called Colebrook
and Co.) label. The Company replaced the Cayenne label with the Siena Studio
label for its mid-priced line of women's leather apparel during 1991 and
introduced a men's textile apparel line in the fall of 1992.

                  In 1997, the Company formed a joint venture with Black
Entertainment Television, Inc. to produce a branded clothing and accessory line
and began shipping the EXSTO XXIV/VII line of apparel in July 1998.

                  The sale of licensed products is a key element of the
Company's strategy and the Company has significantly expanded its offerings of
licensed products over the past several years. In 1993, the Company entered into
a licensing agreement with NFL Properties to market a line of outerwear apparel
with NFL team logos. In 1995, the Company entered into a licensing agreement
with Kenneth Cole Productions to design and market a line of women's leather and
woven outerwear under the Kenneth Cole label. In 1996, the Company entered into
an agreement with the National Hockey League to market a line of outerwear
apparel with NHL team logos.

                  The Company also has license agreements to market products
under the Nine West, Tommy Hilfiger and National Basketball Association ("NBA")
trademarks. The Company is authorized to design and market women's outerwear
under the Nine West label and men's and boys' leather and combination outerwear
under the Tommy Hilfiger label. The Company is also authorized to market adult
and children's leather and leather/textile combination outerwear apparel
utilizing the marks of the NBA and its member teams. The Company began shipping
Nine West, Tommy Hilfiger and NBA apparel in 1998.

                  The Company operates its business in two segments,
non-licensed apparel and licensed apparel. The non-licensed apparel segment
includes sales of apparel under Company- owned brands and private label brands,
as well as commission fee income received on sales when the Company's customer
provides the letter of credit. The licensed apparel segment includes sales of
apparel brands licensed by the Company from third parties. See Note L to the
Company's



                                       -2-








<PAGE>


<PAGE>



Consolidated Financial Statements for financial information with respect to the
Company's segments.

                  The Company sells to approximately 2,000 customers, including
nationwide chains of department and specialty retail stores, price clubs and
individual specialty boutiques. In the fiscal year ended January 31, 1999,
substantially all the Company's products were manufactured for the Company by
foreign independent contractors, located principally in China and Indonesia and,
to a lesser extent, in South Korea, India, the Philippines and Hong Kong. The
Company manufactures certain products at its wholly-owned factory in Indonesia
and its partially owned factory in Northern China. A select number of garments
were also manufactured for the Company by independent contractors located in the
New York City area.

                  References to the Company include the operations of all the
Company's subsidiaries.

PRODUCTS - DEVELOPMENT AND DESIGN

                  The Company manufactures and markets a full line of women's
leather apparel in "junior," "missy," and "half sizes" and an outerwear line of
men's leather apparel at a wide range of retail sales prices. The Company's
product offerings also include textile outerwear, woolen coats, raincoats and
sportswear. The Company's products are sold under Company-owned brand names,
licensed brand names and private retail labels.

                  The G-III lines of non-licensed apparel consist of both men's
and women's products. The G-III line of women's apparel consists of moderately
priced women's leather apparel, which typically sells at retail prices from $30
for sportswear items to $400 for coats. The Siena Collection, which caters to
the higher priced, designer market, typically has retail prices from $300 for
sportswear items to $1,000 for coats. Siena Studio, the Company's bridge-priced
line of women's leather apparel, primarily consists of jackets and skirts with
retail prices from $100 for skirts to $600 for outerwear. Products in the men's
line of leather outerwear, sold under the G-III and Colebrook labels, typically
have retail prices between $40 and $400. The moderately priced line of women's
textile outerwear and sportswear, sold under the Colebrook & Co. label, has
retail prices in the range of $50 to $130. The men's textile apparel line,
consisting of moderately priced outerwear, has retail prices ranging from $25 to
$175.

                  The G-III lines of licensed apparel consist of both men's and
women's products. Women's licensed apparel includes leather and textile garments
which typically sell at retail prices from $50 for sportswear items to $340 for
coats. Men's licensed apparel consists of leather, leather and textile
combination, and textile apparel which typically sell at retail prices from $50
for sportswear items to $560 for coats.

                  The Company works closely with its licensors in creating
designs and styles for each licensed brand sold by the Company. Licensors
generally must approve products to be sold under their brand names prior to
production by the Company.

                  The Company works with retail chains in developing product
lines sold under private retail labels. With regard to private label sales, the
Company meets frequently with buyers who custom order products by color, fabric
and style. These buyers may provide samples to the



                                       -3-






<PAGE>


<PAGE>



Company or may select styles already available in the Company's showrooms. The
Company has established a reputation among such buyers for the ability to
arrange for manufacture of apparel on a reliable, expeditious and cost-effective
basis.

                  The Company's in-house designers are responsible for the
design and look of the Company's products. The Company responds to style changes
in the apparel industry by maintaining a continuous program of style, color and
type of leather and fabric selection. In designing new products and styles, the
Company attempts to incorporate current trends and consumer preferences in the
Company's traditional product offerings. The Company seeks to design products in
response to trends in consumer preferences, rather than to attempt to establish
market trends and styles.

                  Design personnel meet regularly with the Company's sales and
merchandising departments, as well as with the design and merchandising staffs
of the Company's licensors, to review market trends, sales results and the
popularity of the Company's latest products. In addition, representatives of the
Company regularly attend trade and fashion shows and shop at fashion forward
stores in the United States, Europe and the Far East, and present sample items
to the Company along with their evaluation of the styles expected to be in
demand in the United States. The Company also seeks input from selected
customers with respect to product design. The Company believes that its
sensitivity to the needs of its retail customers, coupled with the flexibility
of its production capabilities and its continual monitoring of the retail
market, enables the Company to modify designs and order specifications in a
timely fashion.

                  The Company's arrangements with selected overseas factories
for textile apparel enables it to conduct test-marketing in cooperation with
specialty retailers and department stores prior to full manufacturing and
marketplace introduction of certain styles and products. Test- marketing
typically involves introducing a new style into approximately 20 to 30 store
locations in certain major markets. If the Company finds acceptance of the
product on a consumer level, the Company proceeds with full-scale manufacturing
and market introduction.

LEATHER APPAREL

         MANUFACTURING

                  Substantially all of the Company's products are imported from
independent manufacturers located primarily in Indonesia and China and, to a
lesser extent, in South Korea, India, the Philippines and Hong Kong. The Company
manufactures certain products at its wholly-owned factory in Indonesia and its
partially-owned factory in Northern China. A selected number of garments are
also manufactured for the Company by independent contractors located in the New
York City area.

                  The Company has a branch office in Seoul, South Korea, which
acts as a liaison between the Company and various manufacturers located
throughout Indonesia, China and South Korea used to produce the Company's
leather and woven garments. Upon receipt from the Company's headquarters of
production orders stating the quantity, quality and types of garments to be
produced, this liaison office negotiates and places orders with one or more
Indonesian, Chinese or South Korean manufacturers. In allocating production
among independent suppliers, the



                                       -4-






<PAGE>


<PAGE>



Company considers a number of criteria, including quality, availability of
production capacity, pricing and ability to meet changing production
requirements. At January 31, 1999, the South Korean office employed 12 persons.

                  In connection with the foreign manufacture of the Company's
leather apparel, manufacturers purchase skins and necessary "submaterials" (such
as linings, zippers, buttons and trimmings) according to parameters specified by
the Company. Prior to commencing the manufacture of garments, samples of the
skins and submaterials are sent to the South Korean liaison office and the
Company's New York offices for approval. Employees of the liaison office
regularly inspect and supervise the manufacture of the products for the Company
in order to ensure timely delivery, maintain quality control, monitor compliance
with Company manufacturing specifications and inspect finished apparel.

                  Because of the nature of leather skins, the manufacture of
leather apparel is performed manually. A pattern is used in cutting hides to
panels which are assembled in the factory. All submaterials are also added at
this time. Products are inspected throughout this process to insure that design
and quality specifications of the order, as provided by the Company, are being
maintained as the garment is assembled. After pressing, cleaning and final
inspection, the garment is labeled and hung awaiting shipment. A final random
inspection occurs when the garments are packed for shipment.

                  The Company arranges for the production of apparel on a
purchase order basis, with each order to a foreign manufacturer generally backed
by an irrevocable international letter of credit. Substantially all letters of
credit arranged by the Company require as a condition of release of funds to the
manufacturer, among others, that an inspection certificate be signed by a
representative of the Company. Accordingly, if an order is not filled, the
letter of credit is not paid and the Company does not bear the risk of liability
for the goods being manufactured. The Company assumes the risk of loss on an
F.O.B. basis when goods are delivered to a shipper and is insured against
casualty losses arising during shipping.

                  As is customary in the leather industry, the Company has not
entered into any long-term contractual arrangement with any contractor or
manufacturer. The Company believes that the production capacity of foreign
manufacturers with which it has developed or is developing a relationship is
adequate to meet the Company's leather apparel production requirements for the
foreseeable future. The Company believes that alternative foreign leather
apparel manufacturers are readily available.

                  The Company's arrangements with foreign manufacturers of its
apparel are subject to the usual risks of doing business abroad, including
currency fluctuations, political instability and potential import restrictions.
During the past two years, both Indonesia and South Korea have experienced
significant currency fluctuation and devaluation. In addition, Indonesia has
experienced significant inflation. Although the Company has not been materially
adversely affected by any of such factors to date, due to the significant
portion of the Company's garments which are produced abroad, political
instability in Indonesia or South Korea or elsewhere, or any substantial
disruption in the business of foreign manufacturers or the Company's
relationships with such manufacturers could materially adversely affect the
Company's operations. In addition, since the Company negotiates its purchase
orders with its foreign manufacturers in United States dollars, if the value of




                                       -5-




<PAGE>


<PAGE>



the United States dollar against local currencies were to go down, these
manufacturers might increase the United States dollar prices charged to the
Company for products. Virtually all the Company's imported leather products and
raw materials are subject to United States Customs duties of approximately 6%.

                  A majority of all finished goods manufactured abroad are
shipped to the Company's New Jersey warehouse and distribution facility for
final inspection and allocation and reshipment to customers. The goods are
delivered to the Company and its customers by independent shippers, choosing the
form of shipment (principally ship, truck or air) based upon a customer's needs,
cost, and time considerations.

         MARKETING AND DISTRIBUTION

                  The Company's products are sold primarily to department,
specialty and mass merchant retail stores in the United States. The Company
sells to approximately 2,000 customers, ranging from national and regional
chains of specialty retail and department stores, whose annual purchases from
the Company exceed $1,000,000, to small specialty stores whose annual purchases
from the Company are less than $1,000. In the fiscal years ended January 31,
1997, 1998 and 1999, the Sam's Club and Wal-Mart divisions of Wal-Mart Stores,
Inc. accounted for an aggregate of 12.8%, 17.1% and 21.6%, respectively, of the
Company's net sales. The loss of this customer, which primarily purchases
non-licensed apparel, could have a material adverse affect on the Company's
non-licensed business segment.

                  Almost all of the Company's sales are made in the United
States. The Company also markets its products in Canada and Europe.

                  Along with the Company's foreign offices, the Company's
trading company subsidiary, Global International Trading Company, located in
Seoul, Korea, assists in providing services to the Company's customers. As of
January 31, 1999, Global International Trading Company employed 18 persons.

                  The Company's products are sold primarily through a direct
employee sales force which consisted of 19 employees as of January 31, 1999. The
Company's principal executives are also actively involved in sales of its
products. A limited amount of the Company's products are also sold by various
retail buying offices located throughout the United States. Final authorization
of all sales of products is solely through the Company's New York showroom,
enabling the Company's management to deal directly with, and be readily
accessible to, major customers, as well as to more effectively control the
Company's selling operations.

                  The Company primarily relies on its reputation and
relationships to generate business. The Company believes it has developed a
significant customer following and positive reputation in the industry, as a
result of, among other things, standards of quality control, on-time delivery,
competitive pricing and willingness and ability to assist customers in their
merchandising of the Company's products. In addition, the Company has, to a
limited extent, advertised its products and engaged in cooperative ad programs
with retailers. The Company believes it has developed brand awareness of
Company-owned labels, despite the absence of general advertising, primarily
through its reputation, consumer acceptance and the fashion press.



                                       -6-






<PAGE>


<PAGE>




                  Brand name products sold by the Company pursuant to a license
agreement are promoted by institutional and product advertisements placed by the
licensor. The Company's license agreements generally provide that the Company is
required to pay the licensor a fee, based on a percentage of net sales of
licensed product, to pay for a portion of these advertising costs.

                  The Company operates two retail outlet stores, including one
store located at its Secaucus, New Jersey warehouse. Two stores in Pennsylvania
were closed in January 1999 and no additional stores are planned to be opened
during fiscal 2000.

         RAW MATERIALS

                  Most products manufactured for the Company are purchased by
the Company on a finished goods basis. Raw materials used in the production of
the Company's leather apparel are available from numerous sources and are in
adequate supply. The Company is not aware of any manufacturer of the Company's
apparel not being able to satisfy its requirements for any such raw materials
due to an inadequacy of supply.

                  The leather apparel industry competes with manufacturers of
other leather products for the supply of leather. Leather skins are a byproduct.
Accordingly, raw material costs are impacted by changes in meat consumption
worldwide as well as by the popularity of leather products.

TEXTILE APPAREL

                  The Company also produces outerwear from a variety of textiles
such as wools, cottons and synthetic blends, suitable for leisure and active
wear. The Company designs, imports and markets a moderately priced line of
women's textile outerwear and sportswear under its Colebrook & Co. label and
under private labels. Women's licensed textile outerwear is produced under
Kenneth Cole and Nine West labels. The men's textile apparel line consists of
moderately priced outerwear.

                  The Company's development and design process as well as its
marketing and distribution strategies for textile apparel are similar to those
employed for its leather apparel. See "Products-Development and Design" and
"Leather Apparel -- Marketing and Distribution" of this Item 1 above. Textile
outerwear is manufactured for the Company by several independent contractors
located primarily in the Far East and, to a lesser extent, domestically.
Manufacturers produce finished garments in accordance with production samples
approved by the Company and obtain necessary quota allocations and other
requisite customs clearances.

                  To facilitate better service for the Company's textile and
leather apparel customers and accommodate and control the volume of
manufacturing in the Far East, the Company has an office in Hong Kong. Similar
to the Seoul office, the Hong Kong office acts as a liaison between the Company
and the various manufacturers of textile and leather apparel located in Hong
Kong and



                                       -7-






<PAGE>


<PAGE>



China. The Company utilizes its domestic and Hong Kong office employees to
monitor production at each manufacturer's facility to ensure quality control,
compliance with the Company's specifications and timely delivery of finished
garments to the Company's distribution facilities or customers. The Hong Kong
office employed 8 persons as of January 31, 1999.

                  The Company's arrangements with its textile manufacturers and
suppliers are subject to the risks attendant to doing business abroad, including
the availability of quota and other requisite customs clearances for textile
apparel, the imposition of export duties, political and social instability and
currency fluctuations. United States customs duties on the Company's textile
apparel presently range from 5% to 30%, depending upon the type of fabric used
and how the garment is constructed. The Company monitors duty, tariff and
quota-related developments and seeks to minimize its potential exposure to
quota-related risks through, among other measures, geographical diversification
of its manufacturing sources and shifts of production among countries and
manufacturers.

LICENSING

                  The sale of licensed products is a key element of the
Company's strategy and the Company has significantly expanded its offerings of
licensed products over the last several years. The Company has license
agreements to produce products under the Kenneth Cole, Nine West and Tommy
Hilfiger fashion labels. The Company is also licensed to produce products
containing trademarks of the National Football League, National Hockey League,
National Basketball Association, and several universities located in the United
States. The Company continues to seek other opportunities to enter into
trademark license agreements in order to expand its product offerings under
nationally recognized labels. Revenues from the sale of licensed products
accounted for 37.7% of net sales during fiscal 1999 compared to 24.1% of net
sales in fiscal 1998.

BET DESIGN STUDIO

                  In 1997, the Company formed a joint venture, BET Design
Studio, with Black Entertainment Television, Inc. ("BET"), to produce a branded
clothing and accessory line to be initially targeted to the African-American and
young men's contemporary market. BET has granted a ten-year exclusive license to
the joint venture for the manufacture and distribution of women's, men's and
children's apparel and accessories utilizing "BET," "Black Entertainment
Television" and other BET-related marks. The initial product line, which is
marketed under the EXSTO XXIV/VII label created by the joint venture, was
introduced in February 1998. Shipment of this product line commenced in July
1998.

SEASONALITY

                  Retail sales of outerwear apparel have traditionally been
seasonal in nature. Although the Company sells its apparel products throughout
the year, net sales in the months of July through November accounted for
approximately 75% and 82% of the Company's net sales during the fiscal



                                       -8-






<PAGE>


<PAGE>



years ended January 31, 1998 and 1999, respectively. The July through November
time frame is expected to continue to provide a disproportionate amount of the
Company's net sales.

BACKLOG

                  A significant portion of the Company's orders are short-term
purchase orders from customers who place orders on an as-needed basis. The
amount of unfilled orders at any time has not been indicative of future sales.
Information relative to open purchase orders at any date may also be materially
affected by, among other things, the timing of the initial showing of apparel to
the trade, as well as by the timing of recording of orders and shipments. As a
result, the Company does not believe that the amount of its unfilled customer
orders at any time is meaningful.

TRADEMARKS

                  Several trademarks owned by the Company have been granted
federal trademark protection through registration with the U.S. Patent and
Trademark Office, including for G-III, Avalanche, J.L. Colebrook, Laura Renee,
Laura Jeffries, Colebrook Kids, Urban Cowboy, Cayenne, G-III Outerwear Company
Store, JLC (& design), JLC Outerwear (& design), J.L.C. (& design), and Trouble
Wanted (& design). The Company has applications for several additional
registrations pending before the U.S. Patent and Trademark Office.

                  The Company has been granted trademark protection for G-III in
France, Canada and Mexico, for J.L. Colebrook in Germany, Canada, Mexico,
France, Great Britain and Benelux and for J.L.C. (& design) and JLC (& design)
in Canada. The Company also has several additional applications pending in the
European Community and Canada.

                  Although the Company regards its trademarks as valuable assets
and intends to vigorously enforce its trademark rights, the Company does not
believe that any failure to obtain federal trademark registrations for which it
has applied would have a material adverse effect on the Company.

COMPETITION

                  The apparel business is highly competitive. The Company has
numerous competitors with respect to the sale of leather and textile apparel,
including distributors that import leather apparel from abroad and domestic
retailers with established foreign manufacturing capabilities. Sales of the
Company's products are affected by style, price, quality and general fashion
trends. The Company may also be deemed to compete with vertically-integrated
apparel manufacturers that also own retail stores. In addition, the Company
competes for supplies of raw materials and manufacturing and tanning capacity.

EMPLOYEES


                                       -9-






<PAGE>


<PAGE>



                  As of January 31, 1999, the Company had 266 full-time
employees, of whom 69 worked in executive, administrative or clerical
capacities, 116 worked in design and manufacturing, 57 worked in warehouse
facilities, 19 worked in sales and 5 worked in the retail outlet stores. The
Company employs both union and non-union personnel and believes that the
Company's relations with its employees are good. The Company has not experienced
any interruption of any of its operations due to a labor disagreement with its
employees.

                  The Company is a party to an agreement with the Amalgamated
Clothing and Textile Workers Union (the "Union"), covering approximately 53
full-time employees as of January 31, 1999. This agreement, which is currently
in effect through October 30, 1999, automatically renews on an annual basis
thereafter unless terminated by the Company or the Union prior to August 30 of
that year.



                                      -10-






<PAGE>


<PAGE>




EXECUTIVE OFFICERS OF THE REGISTRANT

                  The following table sets forth certain information with
respect to the executive officers and significant employees of the Company.



<TABLE>
<CAPTION>

                                                                                             Executive
                                                                                             Officer or
                                                                                            Significant
                                                                                              Employee
          Name                            Age              Position                            Since
          ----                            ---              --------                            -----
<S>                                   <C>       <C>                                       <C>
Morris Goldfarb                            48     Co-Chairman of the Board, Chief              1974
                                                  Executive Officer, Director
Aron Goldfarb                              76     Co-Chairman of the Board, Director           1974
Jeanette Nostra-Katz                       47     President                                    1981
Wayne S. Miller                            41     Senior Vice President, Chief                 1998
                                                  Financial Officer, Treasurer and
                                                  Secretary
Carl Katz                                  58     Executive Vice President of                  1981
                                                  Siena, Director
Frances Boller-Krakauer                    33     Vice President - Men's Division of           1993
                                                  G-III
Deborah Gaertner                           44     Vice President - Women's Sales of            1989
                                                  G-III
Keith Sutton Jones                         50     Vice President - Foreign                     1989
                                                  Manufacturing of G-III
Michael Laskau                             43     Vice President - Women's Non-                1994
                                                  Branded Division of G-III
</TABLE>



                  Morris Goldfarb is the Co-Chairman of Board and Chief
Executive Officer of the Company, as well as one of its directors. Until April,
1997, Mr. Goldfarb also served as President of the Company. He has served as
either President or Vice President of G-III Leather Fashions, Inc. ("G-III")
since its formation in 1974. Mr. Goldfarb is responsible for the foreign
manufacture, marketing, merchandising and financing of the G-III line of
apparel. He also has overall responsibility for developing selling programs,
customer relations and administration of the Company. Mr. Goldfarb is also a
director of Lakes Gaming, Inc. and Wilsons The Leather Experts.

                  Aron Goldfarb is Co-Chairman of the Board of the Company and
its founder. Mr. Goldfarb served as either President or Vice President of G-III
and as a Vice President of Siena from their respective formations until 1994
and, since January 1995, has served as a consultant to the Company.



                                      -11-






<PAGE>


<PAGE>



                  Jeanette Nostra-Katz became President of the Company in April
1997. She had been the Executive Vice President of the Company since March 1992.
Ms. Nostra-Katz's responsibilities for the Company include sales for the women's
product lines, marketing, public relations, and operations as they relate to
sales. Since August 1989, she has served as an Executive Vice President of
Siena. Ms. Nostra-Katz has been employed by the Company since 1981 in various
capacities.

                  Wayne S. Miller has been employed by the Company as its Chief
Financial Officer and Senior Vice President since April 1998. In November 1998,
Mr. Miller was also elected Secretary and Treasurer. Mr. Miller served as a
consultant to Marketing Management Group from September 1997 to April 1998. From
June 1994 to September 1997, Mr. Miller was Executive Vice President, Chief
Financial Officer and Secretary of Bernard Chaus, Inc. From April 1994 to May
1994, Mr. Miller was Crisis Manager for USA Classics, Inc. and from February
1994 to March 1994, he served as a Consultant to Marketing Management Group.

                  Carl Katz has been employed as an Executive Vice President of
Siena since August 1989 and, prior thereto, as a Vice President of Siena since
1981. Mr. Katz supervises the merchan dising and designing, as well as
production and pattern and sample making, for the Siena and Sports Licensing
divisions. Mr. Katz is also a director of the Company.

                  Frances Boller-Krakauer is Vice President -- Men's Division of
G-III and has held the position since February 1993. Ms. Boller-Krakauer's
responsibilities include sales and merchandising for all men's products lines.
Prior to February 1993, she held various sales positions in the Men's Division.
Ms. Boller-Krakauer joined the Company in March 1989.

                  Deborah Gaertner is the Vice President -- Women's Non-Branded
Sales of G-III. Ms. Gaertner is responsible for sales and marketing of the
women's apparel line (excluding Kenneth Cole licensed apparel). She served
previously as Vice President, Imports since June 1989, coordinating production
and merchandising.

                  Keith Sutton Jones is the Vice President -- Foreign
Manufacturing of G-III and has been employed in such capacity since January
1989. His responsibilities include coordinating and controlling all aspects of
the Company's Far Eastern sourcing and production.

                  Michael Laskau is a Vice President -- Women's Non-Branded
Division of G-III and has been employed in such capacity since July 1994. His
responsibilities include coordinating the production and merchandising of the
Company's textile apparel. For the 18 years prior to joining the Company, Mr.
Laskau was in charge of production and sourcing at Junior Gallery, an importer
of apparel.

                  Aron Goldfarb and Morris Goldfarb are father and son,
respectively. Carl Katz and Jeanette Nostra-Katz are married to each other.


                                      -12-






<PAGE>


<PAGE>




I
TEM 2.           PROPERTIES

                  The Company's executive offices, sales showrooms and support
staff are located at 512 Seventh Avenue, which is one of the leading outerwear
apparel buildings in New York City. The Company leases an aggregate of
approximately 31,800 square feet in this building through January 31, 2003 at a
current aggregate annual rent of approximately $512,000. The sales showrooms and
support staff of BET Design Studio, LLC, are also located at 512 Seventh Avenue.
It leases approximately 8,100 square feet with a current aggregate annual rent
of approximately $110,000.

                  The Company's warehouse and distribution facility, located in
Secaucus, New Jersey, contains approximately 107,000 square feet, plus a 3,000
square foot retail outlet store. This facility is leased through March, 2000 at
an annual rent of approximately $482,000. The lease provides for two option
renewal terms of five years each with rental for the renewal term based on
market rates. A majority of the Company's finished goods are shipped to the New
Jersey distribution facilities for final reshipment to customers.

                  In March 1996, the Company subleased its other warehouse and
distribution facility in Secaucus, New Jersey to an unaffiliated third party and
consolidated all of its warehouse and distribution operations at one location.
The sublease is co-extensive with the lease term, which extends through March
2000, although the sublessee has the right to terminate the sublease at any time
on six months notice. The sublease, provides for the sublessee to pay rent of
approximately $700,000 per year to the Company and for the Company to pay all
operating costs of the facility except for utilities and internal maintenance.
The Company's annual rent obligation to the lessor of this facility increases
from approximately $750,000 to $937,000 during the term of the sublease.

                  The Company maintains cutting rooms for its Siena division and
off-site storage at 345 West 37th Street in New York City. This property is
leased pursuant to a sublease from a corporation owned by Morris Goldfarb and
Aron Goldfarb for which the Company pays rent monthly, plus real estate taxes.
For the fiscal years ended January 31, 1998 and 1999, the total payments for
this building were approximately $359,000 and $325,000, respectively. In fiscal
1999, the Company sublet a portion of the 345 West 37th Street building to three
different tenants. Two of the subleases have five-year terms and the other
sublease is for a three-year term. The aggregate annual rental paid to the
Company under these three subleases is approximately $154,000.

                  In January 1999 the Company closed two of its four retail
outlet stores. Of the two remaining stores, one is located at its distribution
facility and one is located in Secaucus, New Jersey.


ITEM 3.           LEGAL PROCEEDINGS

                  None.



                                      -13-






<PAGE>


<PAGE>




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

                  None.



                                      -14-






<PAGE>


<PAGE>




                                     PART II


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

MARKET FOR COMMON STOCK

                  The Common Stock is publicly traded in the over-the-counter
market and is quoted on the Nasdaq Stock Market under the trading symbol
"G-III". The following table sets forth, for the fiscal periods shown, the high
and low last sales prices for the Common Stock, as reported by the Nasdaq Stock
Market.



<TABLE>
<CAPTION>
Fiscal 1998                                                     High Prices             Low Prices
- -----------                                                     -----------             ----------
<S>                                                       <C>                    <C>
Fiscal Quarter ended April 30, 1997                         $ 5  1/4               $ 3  7/16
Fiscal Quarter ended July 31, 1997                            6  1/2                 4  7/8
Fiscal Quarter ended October 31, 1997                         6  3/8                 4  9/16
Fiscal Quarter ended January 31, 1998                         5  3/4                 4  3/8

Fiscal 1999
- -----------
Fiscal Quarter ended April 30, 1998                         $ 6  7/8               $ 5  1/4
Fiscal Quarter ended July 31, 1998                            6  3/8                 3  7/8
Fiscal Quarter ended October 31, 1998                         4  3/8                 1  5/8
Fiscal Quarter ended January 31, 1999                        12  1/4                 1  5/8

Fiscal 2000
- -----------
Fiscal Quarter ended April 30, 1999                         $ 3  1/2               $ 1  15/16
(through March 31, 1999)
</TABLE>



                  The last sales price of the Common Stock as reported by the
Nasdaq Stock Market on March 31, 1999 was $2.375 per share.

                  On March 31, 1999, there were 77 holders of record and, the
Company believes, approximately 1,500 beneficial owners of the Common Stock.

DIVIDEND POLICY

                  The Board of Directors currently intends to follow a policy of
retaining any earnings to finance the continued growth and development of the
Company's business and does not anticipate paying cash dividends in the
foreseeable future. Any future determination as to the payment of cash dividends
will be dependent upon the Company's financial condition, results of operations
and other factors deemed relevant by the Board of Directors. Certain agreements
related to the financing of the building at 345 West 37th Street offices
prohibit the payment of cash dividends without consent.


                                      -15-







<PAGE>


<PAGE>



In addition, the Company's loan agreement prohibits the payment of cash
dividends without the consent of the banks. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" in Item 7 below.


ITEM 6.           SELECTED CONSOLIDATED FINANCIAL DATA

                  The selected consolidated financial data set forth below as of
and for the years ended January 31, 1995 1996, 1997, 1998 and 1999 have been
derived from the audited consolidated financial statements of the Company. The
audited financial statements as of January 31, 1995, 1996 and 1997 and for the
years ended January 31, 1995 and 1996 are not included in this filing. The
selected consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" (Item 7 of this Report) and the audited consolidated financial
statements and related notes thereto included elsewhere herein.



                                      -16-






<PAGE>


<PAGE>



                 (In thousands, except share and per share data)


<TABLE>
<CAPTION>

                                                                                  Year Ended January 31, (1)
                                                           -------------------------------------------------------------------
                                                             1995          1996           1997         1998             1999
                                                           --------      --------       --------     --------        ---------
<S>                                                      <C>           <C>            <C>           <C>             <C>
INCOME STATEMENT DATA:
Net Sales.............................................     $171,441      $121,663       $117,645     $120,136         $121,644
Cost of goods sold....................................      144,830        97,060         88,057       91,559           95,393
                                                           --------     ---------      ---------    ---------        ---------
Gross profit..........................................       26,611        24,603         29,588       28,577           26,251
Selling, general &                                                                                                             
  administrative expenses.............................       27,477        22,478         23,542       23,787           27,235
Unusual or non-                                                                                                                
  recurring charges...................................       11,320          --             --           --               --
                                                           --------     ---------      ---------    ---------        ---------

Operating profit (loss)...............................      (12,186)        2,125          6,046        4,790             (984)
Interest expense......................................        3,959         2,433          2,075        1,534            2,115
                                                           --------     ---------      ---------    ---------        ---------
Income before minority interest and
  income taxes (loss).................................      (16,145)         (308)         3,971        3,256           (3,099)
Minority interest.....................................          324          --            --             449            1,378
                                                           --------     ---------      ---------    ---------        ---------
Income (loss) before income taxes.....................      (15,821)         (308)         3,971        3,705           (1,721)
Income taxes (benefit)................................       (4,087)           89            885          906             (541)
                                                           --------     ---------      ---------    ---------        ---------

Net income (loss).....................................     $(11,734)    $    (397)     $   3,086    $   2,799        $  (1,180)
                                                           ========     =========      =========    =========        =========

Basic earnings (loss)
    per share.........................................       $(1.82)    $   (0.06)     $    0.48    $    0.43        $   (0.18)
                                                           ========     =========      =========    =========        =========
Weighted average                                   
  shares outstanding - basic..........................    6,459,381     6,459,975      6,468,830    6,486,899        6,539,128

Diluted earnings (loss)
    per share ........................................      $ (1.82)      $ (0.06)       $  0.46      $  0.40          $ (0.18)
                                                           ========       =======        =======      =======          =======
Weighted average 
  shares outstanding - diluted........................    6,459,381     6,459,975      6,739,029    7,051,099        6,539,128
</TABLE>





<TABLE>
<CAPTION>
 
                                                                                    As of January 31, (1)
                                                                ------------------------------------------------------
                                                                  1995       1996       1997        1998        1999
                                                                --------    -------    -------     -------    --------
BALANCE SHEET DATA:
<S>                                                             <C>         <C>        <C>         <C>        <C>
Working capital.............................................    $ 22,602    $22,224    $24,497     $29,296    $27,237
Total assets................................................      54,572     41,257     44,555      46,746     44,870
Short-term debt.............................................      13,480      3,551      3,835       3,734      2,893
Long-term debt,                                                                                                       
  excluding current portion.................................       1,479        919        554         352        180
Total stockholders' equity..................................      30,101     29,716     32,825      35,686     35,575
</TABLE>


- --------------------
(1)  Certain amounts have been reclassified to conform to the 1999 presentation.



                                      -17-






<PAGE>


<PAGE>





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

         Statements in this Annual Report on Form 10-K concerning the Company's
business outlook or future economic performance; anticipated revenues, expenses
or other financial items; product introductions and plans and objectives related
thereto; and statements concerning assumptions made or expectations as to any
future events, conditions, performance or other matters, are "forward-looking
statements" as that term is defined under the Federal securities laws. Forward-
looking statements are subject to risks, uncertainties and other factors which
could cause actual results to differ materially from those stated in such
statements. Such risks, uncertainties and factors include, but are not limited
to, reliance on foreign manufacturers, risks of doing business abroad, the
nature of the apparel industry, including changing consumer demand and tastes,
seasonality, customer acceptance of new products, the impact of competitive
products and pricing, dependence on existing management, general economic
conditions, and information relating to Year 2000 issues, as well as other risks
detailed in the Company's filings with the Securities and Exchange Commission,
including this Annual Report on form 10-K.

                  The following presentation of management's discussion and
analysis of the Company's financial condition and results of operations should
be read in conjunction with the Company's Financial Statements, accompanying
notes thereto and other financial information appearing elsewhere in this
Report.

                  References to fiscal years refer to the year ended January 31
of that year.


                                      -18-






<PAGE>


<PAGE>



RESULTS OF OPERATIONS

                  The following table sets forth selected operating data of the
Company as a percentage of net sales for the fiscal years indicated below:



<TABLE>
<CAPTION>

                                                                           1997            1998            1999
                                                                        ---------        ---------      ---------
<S>                                                                       <C>              <C>            <C>
Net sales........................................................         100.0%           100.0%         100.0%

Cost of goods sold...............................................          74.8             76.2           78.4
                                                                           ----             ----           ----
Gross profit.....................................................          25.2             23.8           21.6

Selling, general and administrative expenses                               20.1             19.8           22.4
                                                                           ----             ----           ----
Operating profit (loss)..........................................           5.1              4.0           (0.8)

Interest expense.................................................           1.8              1.3            1.7
                                                                           ----             ----           ----
Income (loss) before minority interest and income taxes..........           3.3              2.7           (2.5)
Minority interest................................................                           (0.4)          (1.1)
                                                                           ----             ----           ----
Income (loss) before income taxes................................           3.3              3.1           (1.4)

Income taxes.....................................................           0.7              0.8           (0.4)
                                                                            ---              ---           ----
Net income (loss)................................................           2.6              2.3           (1.0)
                                                                            ===              ===           ====
</TABLE>



General

                  The Company operates its business in two segments,
non-licensed apparel and licensed apparel. The non-licensed apparel segment
includes sales of apparel under Company- owned brands and private label brands,
as well as commission fee income received on sales when the Company's customer
provides the letter of credit. The licensed apparel segment includes sales of
apparel brands licensed by the Company from third parties. See Note L to the
Company's Consolidated Financial Statements for financial information with
respect to the Company's segments.

                  One of the key elements of the Company's strategy is to expand
its offering of licensed apparel. During fiscal 1999, the Company commenced the
shipment of product under the Nine West, Tommy Hilfiger and NBA labels. The
Company's net loss during fiscal 1999 was primarily attributable to lower
margins in the Company's non-licensed business, as well as losses from its joint
venture with BET. These operating factors were offset to some extent by
continued expansion of the Company's licensed business.

                  During fiscal 1998, the Company entered into a joint venture
with BET to design, manufacture, and distribute sportswear and outerwear apparel
targeted to the African American and urban consumer. The initial product
offerings by the joint venture were introduced in February 1998


                                      -19-






<PAGE>


<PAGE>



and the Company began shipping product in July 1998. The Company owns 50.1% of
this joint venture and, accordingly, its entire results of operation are
consolidated with those of the Company. The interest of BET in the joint venture
is reflected in the "Minority interest" line item in the Company's financial
statements. The Company incurred approximately $450,000 of losses, net of BET's
interest, in fiscal 1998 and approximately $1.4 million of losses, net of BET's
interest, in fiscal 1999. During February 1999, BET and the Company each
contributed an additional $500,000 to the joint venture. The Company expects to
continue to incur losses from this joint venture in fiscal 2000.

                  Certain areas of Southeast Asia have experienced significant
economic problems during the past two years. The Company utilizes manufacturers
located in Indonesia and South Korea, owns a manufacturing factory in Indonesia,
and has a branch office in South Korea. Both of these countries have experienced
significant inflation and currency devaluation during the past year. While the
devaluation of the currency in these countries may reduce the Company's
operating costs in these locations, political instability and/or severe
inflation in Indonesia or South Korea, or in other countries in which product is
manufactured for the Company, could materially adversely affect the Company's
results of operations.

Year Ended January 31, 1999 ("fiscal 1999") Compared
to year Ended January 31, 1998 ("fiscal 1998")

                  Net sales were $121.6 million in fiscal 1999 compared to
$120.1 million in fiscal 1998. Net sales were adversely affected in fiscal 1999
by the unseasonably warm weather conditions in the fall of 1998 in many sections
of the United States. An increase of $16.9 million in sales of licensed apparel
was partially offset by a decrease of $15.4 million in sales of non-licensed
apparel, which includes certain product lines which were discontinued at the end
of the prior fiscal year. These product lines accounted for $2.5 million of
sales in fiscal 1998. Sales of licensed apparel accounted for 37.7% and 24.1% of
the Company's net sales in fiscal 1999 and 1998, respectively.

                  Gross profit was $26.3 million in fiscal 1999 compared to
$28.6 million in fiscal 1998. As a percentage of net sales, gross profit was
21.6% in fiscal 1999 compared to 23.8% in fiscal 1998. Commission fee income,
for which there is no related cost of goods sold, was $3.5 million in fiscal
1999 compared to $6.7 million in fiscal 1998.

                  Gross profit for licensed apparel was $10.6 million in fiscal
1999 compared to $5.7 million in fiscal 1998, or 23.1% of net sales of licensed
apparel in fiscal 1999 compared to 19.6% of net sales of licensed apparel in
fiscal 1998. The higher gross profit margin percentage for licensed apparel in
fiscal 1999 was due to increased sales of higher gross profit margin products
within the licensed apparel segment. Gross profit for non-licensed apparel was
$15.7 million in fiscal 1999 compared to $22.9 million in fiscal 1998, or 20.7%
of net sales of licensed apparel in fiscal 1999 compared to 25.1% of net sales
of licensed apparel in fiscal 1998. The reduction in gross profit as a
percentage of sales for non-licensed apparel resulted primarily from lower
commission fee income and increased inventory markdowns due to the unseasonably
warm weather conditions.



                                      -20-






<PAGE>


<PAGE>



                  Selling, general and administrative expenses were $27.2
million in fiscal 1999 compared to $23.8 million in fiscal 1998. These expenses
included approximately $2.7 million of expenses in fiscal 1999 and $898,000 of
expenses in fiscal 1998 attributable to the joint venture with BET. Excluding
the BET joint venture expenses, selling, general and administrative expenses
were $24.5 million in fiscal 1999 compared to $22.9 million in fiscal 1998. As a
percentage of net sales, selling, general and administrative expenses, excluding
the BET joint venture expenses, were 20.1% in fiscal 1999 compared to 19.1% in
fiscal 1998. The increase in selling, general and administrative expenses,
excluding BET joint venture expenses, is primarily attributable to the
incremental expenses in the areas of personnel, samples and advertising fees
paid to its licensees due to the addition of the Nine West, Tommy Hilfiger and
NBA licenses. BET joint venture expenses increased primarily in the area of
personnel and advertising as staffing levels increased and advertising programs
began.

                  Interest expense was $2.1 million in fiscal 1999 compared to
$1.5 million in fiscal 1998. The higher interest expense related to increased
borrowings as a result of higher average finished goods inventory levels, offset
in part by lower interest rates.

                  As a result of the foregoing, the Company incurred a loss
before income taxes of $1.7 million in fiscal 1999 compared to income before
taxes of $3.7 million in fiscal 1998.

                  The income tax benefit was $541,000 in fiscal 1999 compared to
income tax expense of $906,000 in fiscal 1998. The Company's effective tax
benefit rate for fiscal 1999 was 31.4%, which was lower than the statutory rate
due to the limitation of the availability of certain state and local tax
benefits. In fiscal 1998, the effective tax rate was 24.5% as a result of tax
benefits derived from state net operating loss carry forwards and deferred tax
benefits.

                  The Company had a net loss of $1.2 million, or $.18 per share
on a diluted basis, in fiscal 1999 compared to net income of $2.8 million, or
$.40 per share on a diluted basis, in fiscal 1998.

Year Ended January 31, 1998 Compared
to year Ended January 31, 1997 ("fiscal 1997")

                  Net sales were $120.1 million in fiscal 1998 compared to
$117.6 million in fiscal 1997. An increase of approximately $7.3 million in net
sales of the Company's licensed apparel was offset, in part, by a decrease of
approximately $2.1 million in net sales of non-licensed apparel and the
discontinuance of two product lines that accounted for approximately $2.5
million of net sales in fiscal 1997. Sales of licensed apparel accounted for
24.1% and 18.4% of the Company's net sales in fiscal 1998 and 1997,
respectively.

                  Gross profit was $28.6 million in fiscal 1998 compared to
$29.6 million in fiscal 1997. Commission fee income, for which there is no
related cost of goods sold, was $6.7 million in fiscal 1998 as compared to $10.0
million in fiscal 1997. As a percentage of net sales, gross profit was 23.8% in
fiscal 1998 compared to 25.2% in fiscal 1997.


                                      -21-






<PAGE>


<PAGE>



                  Gross profit for licensed apparel was $5.7 million in fiscal
1998 compared to $4.5 million in fiscal 1997, or 19.6% of net sales of licensed
apparel in fiscal 1998 compared to 20.7% of net sales of licensed apparel in
fiscal 1997. The lower gross profit margin percentage for licensed apparel in
fiscal 1998 was due to decreased sales of higher gross profit margin products.
Gross profit for non-licensed apparel was $22.9 million in fiscal 1998 compared
to $25.1 million in fiscal 1997, or 25.1% of net sales of non-licensed apparel
in fiscal 1998 compared to 26.2% of net sales of non-licensed apparel in fiscal
1997. The reduction in gross profit as a percentage of sales of non-licensed
apparel was primarily attributable to lower commission fee income.

                  Selling, general and administrative expenses were $23.8
million in fiscal 1998, including $898,000 of expenses with respect to BET joint
venture expenses. Excluding the BET joint venture expenses, selling, general and
administrative expenses were $22.9 million in fiscal 1998 compared to $23.5
million in fiscal 1997. As a percentage of net sales, selling, general and
administrative expenses, excluding the BET joint venture expenses were 19.1% in
fiscal 1998 compared to 20.0% in fiscal 1997. The slight decrease in selling,
general and administrative expenses is primarily attributable to closing two
stores in the Company's retail outlet division during fiscal 1998, lower
warehousing and distribution costs, and savings from discontinued product
divisions, partially offset by higher payroll costs.

                  Interest expense was $1.5 million in fiscal 1998 compared to
$2.1 million in fiscal 1997. This decrease in interest expense is primarily
attributable to lower interest rates under the Company's amended credit facility
entered into in May 1997 and interest income earned on excess cash at the
beginning of the year.

                  As a result of the foregoing, the Company realized income
before income taxes of $3.7 million in fiscal 1998 compared to income before
income taxes of $4.0 million in fiscal 1997.

                  Income taxes were $906,000 in fiscal 1998 compared to $885,000
in fiscal 1997. The Company's effective tax rate for fiscal 1998 was 24.5% which
included benefits from net operating loss carry forwards for state income tax
purposes and the reversal of the deferred tax asset valuation allowance. In
fiscal 1997, the effective tax rate was 22.3% as a result of tax benefits
derived from state net operating loss carry forwards and deferred tax benefits.

                  The Company had net income of $2.8 million, or $.40 per share
on a diluted basis, in fiscal 1998 compared to a net income of $3.1 million, or
$.46 per share on a diluted basis, in fiscal 1997.

LIQUIDITY AND CAPITAL RESOURCES

                  The Company's loan agreement, which expires May 31, 1999, is a
collateralized working capital line of credit with three banks that provides for
a maximum line of credit in amounts that range from $40 million to $63.5 million
at specific times during the year. The line of credit provides for maximum
direct borrowings ranging from $30 million to $50 million during the year.


                                      -22-






<PAGE>


<PAGE>



The unused balance may be used for letters of credit. Amounts available for
borrowing are subject to borrowing base formulas and overadvances specified in
the agreement.

                  Direct borrowings under the line of credit bear interest at
the agent bank's prime rate (7.75% as of April 1, 1999) or LIBOR plus 250 basis
points, at the election of the Company. The loan agreement requires the Company,
among other covenants, to maintain certain earnings and tangible net worth
levels, and prohibits the payment of cash dividends. The amount borrowed under
the line of credit varies based on the Company's seasonal requirements. The
maximum amount outstanding (i.e., open letters of credit, bankers acceptances
and direct borrowings) under the Company's loan agreement was approximately
$44.9 million, $44.9 million and $43.0 million during fiscal 1997, 1998 and
1999, respectively. As of January 31, 1999, there were no direct borrowings, no
bankers' acceptances and $3.8 million of contingent liability under open letters
of credit. As of January 31, 1998, there were no outstanding direct borrowings,
no bankers' acceptances and $6.8 million of contingent liability under open
letters of credit.

                  The Company is in discussions with its banks to extend the
loan agreement to May 31, 2002 under terms similar to the existing loan
agreement.

                  The Company's wholly owned Indonesian subsidiary had a line of
credit with a bank for approximately $3.5 million which had been supported by a
$2.0 million stand-by letter of credit issued under the Company's loan
agreement. In May 1998, the bank drew down the stand by letter of credit,
reducing the factory's credit line to $1.5 million. As of January 31, 1999, the
borrowing by the Indonesian subsidiary under its line of credit approximated
$1.5 million.

                  In fiscal 1998, the Company formed a joint venture with Black
Entertainment Television, Inc. ("BET"). The joint venture agreement provides for
the Company and BET each to make an initial capital contribution in the amount
of $1.0 million. In addition, the agreement provides for the Company and BET
each to make additional capital contributions up to $1.0 million. As of January
31, 1999, BET and the Company had each contributed $1.5 million to this joint
venture. During February 1999, BET and the Company each contributed an
additional $500,000 to the joint venture. The joint venture has an asset based
credit facility with The CIT Group. To support the requirement for overadvances
which occur when the available collateral is not sufficient to support the level
of direct bank debt and letters of credit opened to pay for product, both
partners have opened stand-by letters of credit in the amount of $750,000 under
which The CIT Group is the beneficiary. As of January 31, 1999, there were $1.2
million of direct borrowings and $360,000 of contingent liability under open
letters of credit.

                  There was $2.3 million of cash provided by operating
activities in fiscal 1999 primarily as a result of a reduction in the
inventories added in the prior year. The Company used $6.5 million of cash in
operating activities in fiscal 1998 primarily due to increased inventories and
accounts receivable. The Company's inventories increased because of an increase
in finished goods inventory due to an unusually mild winter season causing
reorders to be lower than expected and an acceleration in the purchase of raw
material inventory to take advantage of lower prices due to the economic crisis
in Asia. Year end accounts receivable balances were higher than the previous
year


                                      -23-






<PAGE>


<PAGE>



primarily due to a higher shipping volume in January 1998. There was $5.9
million of cash provided by operating activities in fiscal 1997 primarily as a
result of the net income generated in fiscal 1997.

                  The Company used $419,000, $498,000 and $968,000 in cash for
investing activities in fiscal 1997, fiscal 1998 and fiscal 1999, respectively,
primarily for capital expenditures. Historically, the Company's business has not
required significant capital expenditures. The Company's capital expenditures
were approximately $507,000, $1.3 million and $1.7 million for fiscal 1997, 1998
and 1999, respectively. Capital expenditures were used primarily for new
computer software, additional computer upgrades, leasehold improvements and
furniture, fixtures and equipment. In addition, capital expenditures in fiscal
1998 and fiscal 1999 include $451,000 and $108,000, respectively, of capital
costs for the BET Design Studio joint venture showroom and support office.

                  In fiscal 1999, the Company had $56,000 of cash provided by
financing activities. In fiscal 1999, the Company used $1.0 million to reduce
the amount of notes payable and for the payment of capital lease obligations.
This was more than offset by cash and tax benefits related to the exercise of
stock options and the disgorgement of stock sales profits by certain officers of
the Company. The Company used $58,000 and $241,000 in financing activities in
fiscal 1997 and fiscal 1998, respectively, primarily for the payment of capital
lease obligations.

YEAR 2000 COMPLIANCE

         The Company believes that advanced information processing is essential
to maintaining its competitive position. The Company participates in the
electronic data interchange program maintained by many of its larger customers,
including Federated Department Stores, Wal-Mart and J. C. Penney Co. This
program allows the Company to receive customer orders, provide advanced shipping
notices, monitor store inventory and track orders on-line from the time such
orders are placed through delivery. The Company is also able to notify certain
of its customers' warehouses in advance as to shipments.

                  The Company has a formal Year 2000 compliance schedule for the
Company's IT systems. The Company completed an upgrade of its accounting systems
in July 1998 to ensure proper processing of transactions relating to the Year
2000 and beyond. In addition, the Company is currently evaluating its other
management information systems, such as its manufacturing and distribution
systems, microcomputers, telephones and fax machines, and has established plans
to upgrade, modify or replace such equipment. The Company continues to evaluate
appropriate courses of corrective actions, including replacement of certain
systems. The Company expects to complete this process and be Year 2000 compliant
by mid-1999.

                  The Company does not expect the cost associated with ensuring
year 2000 compliance to have a material effect on its financial position or
results of operations. All costs associated with Year 2000 compliance are being
funded with working capital and are being expensed as incurred. The Company
currently estimates that it will expend approximately $200,000 to



                                      -24-






<PAGE>


<PAGE>



$300,000 to complete its Year 2000 compliance. Of this amount, $60,000 was
expended during fiscal 1999 and the remainder will be incurred in fiscal 2000.

                  Based on current information, the Company believes that the
Y2K problem will not have a material adverse effect on the Company, its business
or its financial condition There can, however, be no assurances that Y2K
remediation by the Company or third parties will be properly and timely
completed, and failure to do so could have a material adverse effect on the
Company, is business and its financial condition. The Company believes that the
greatest risk presented by the Y2K problem is from third parties, such as
suppliers, financial institutions utility providers, etc. who may not have
adequately addressed the problem. A failure of any such third party's computer
or other applicable systems in sufficient magnitude could materially and
adversely affect the Company. The Company is not presently able to quantify
this risk.

                  The Company is unable to assess a reasonable worst case Y2K
scenario given a number of factors outside of the Company's direct or indirect
control, including among others, the Company's current evaluation and assessment
status and the uncertainty of the readiness of vendors and customers. The
Company recognizes the risks in its ability to conduct business if other key
suppliers in utilities, communications, transportation, banking and government,
both domestic (local, state and federal) and foreign, are not Y2K ready. The
Company is in the process of surveying vendors and customers about their
readiness. Upon completion of this survey, the Company will complete its own
internal review of this information to verify the accuracy of the responses. The
Company is monitoring news and progress reports pertaining to those critical
services to determine the effect on the Company's ability to conduct business as
a result of Y2K issues on the economy if those and other key suppliers in
utilities, communications, transportation, banking and government, both domestic
(local, state and federal) and foreign, cease to function. Once the Company has
completed its assessment and remediation phases of the Y2K issue, the Company
will develop appropriate worst-case scenarios and plans to deal with such
contingencies while it develops its contingency plans which are expected to be
completed in mid 1999. At this time the Company has not developed any such
contingency plans.


I
TEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

IMPACT OF INFLATION AND FOREIGN EXCHANGE

                  The results of operations of the Company for the periods
discussed have not been significantly affected by inflation or foreign currency
fluctuation. The Company negotiates its purchase orders with its foreign
manufacturers in United States dollars. Thus, notwithstanding any fluctuation in
foreign currencies, the Company's cost for any purchase order is not subject to
change after the time the order is placed. However, if the value of the United
States dollar against local currencies was to go down, certain manufacturers
might increase their United States dollar prices for products.

INTEREST RATE EXPOSURE

                  The Company is subject to market risk from exposure to changes
in interest rates relating primarily to the Company's short-term debt
obligations. The Company primarily enters into such short-term debt obligations
to support general corporate purposes, including capital expenditures and
working capital needs. All of the Company's debt is short-term with variable
rates. To manage its exposure to changes in interest rates, the Company's policy
is to manage such interest rate exposure through the use of short-term
borrowings, which are negotiated with their lenders on a periodic basis. The
Company does not expect changes in interest rates to have a material adverse
effect on income or cash flows in fiscal 2000, although there can be no
assurance that interest rates will not significantly change.


ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  Financial statements and supplementary data required pursuant
to this Item begin on page F-1 of this Report.



                                      -25-






<PAGE>


<PAGE>




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

                  None.




                                      -26-






<PAGE>


<PAGE>





                                    PART III


ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

                  The information contained under the heading "Proposal No. 1-
Election of Directors" in the Company's definitive Proxy Statement (the "Proxy
Statement") relating to the Company's Annual Meeting of Stockholders to be held
on or about June 17, 1999, to be filed pursuant to Regulation 14A of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission is
incorporated herein by reference. For information concerning the executive
officers and other significant employees of the Company, see "Business-Executive
Officers of the Registrant" in Item 1 above of this Report.


ITEM 11.          EXECUTIVE COMPENSATION

                  The information contained under the heading "Executive
Compensation" in the Company's Proxy Statement is incorporated herein by
reference.


ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

                  The information contained under the heading "Security
Ownership of Common Stock by Certain Stockholders and Management" in the
Company's Proxy Statement is incorporated herein by reference.


ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  The information contained under the heading "Certain
Relationships and Related Transactions" in the Company's Proxy Statement is
incorporated herein by reference.


                                      -27-






<PAGE>


<PAGE>




                                     PART IV


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


<TABLE> 
    <S>         <C>
         (a)      1.       Financial Statements.

                  2.       Financial Statement Schedules.

                  The Financial Statements and Financial Statement Schedules are
                  listed in the accompanying index to financial statements
                  beginning on page F-1 of this report.

                  3.                Exhibits:

                  3.1               Certificate of Incorporation.(1)

                  3.2               By-Laws, as amended, of G-III Apparel Group, Ltd. (the
                                    "Company").(8)

                  10.1              Employment Agreement, dated February 1, 1994, between the
                                    Company and Morris Goldfarb.(5)

                  10.3              Fourth Amended and Restated Loan Agreement,
                                    dated May 31, 1997, by and among G-III
                                    Leather Fashions, Inc. ("G-III"), the banks
                                    signatories thereto (the "Banks"), and Fleet
                                    Bank, N.A. ("Fleet Bank"), as Agent,
                                    Collateral Monitoring Agent and Issuing Bank
                                    for such Banks.(8)

                  10.3(a)           Amendment No. 1 to the Fourth Amended and Restated Loan
                                    Agreement, dated June 1, 1998, by and among G-III, the Banks and
                                    Fleet Bank.(10)

                  10.3(b)           Amendment No. 2 to the Fourth Amended and Restated Loan
                                    Agreement, dated June 24, 1998, by and among G-III, the Banks and
                                    Fleet Bank.(11)

                  10.3(c)           Amendment No. 3 to the Fourth Amended and Restated Loan
                                    Agreement, dated July 31, 1998, by and among G-III, the Banks and
                                    Fleet Bank.(11)

                  10.3(d)           Amendment No. 4 to the Fourth Amended and Restated Loan
                                    Agreement, dated March 30, 1999, by and among G-III, the Banks
                                    and Fleet Bank.
</TABLE>




                                      -28-






<PAGE>


<PAGE>



<TABLE> 
    <S>       <C>
                  10.4              Lease Agreement, dated as of October 20, 1987, between 3738 West
                                    Company and G-III.(2)

                  10.5              Lease Agreement, dated as of September 14, 1989, between 3738
                                    West Company and G-III.(2)

                  10.6              Sublease Agreement, dated March 9, 1990, between GWC
                                    Investments and the Company.(3)

                  10.7              Agreement of Sub-Sublease, dated December 27, 1995, and First
                                    Amendment thereto, dated February 16, 1996, between the Company
                                    and Europe Craft Imports, Inc.(7)

                  10.8              Lease, dated September 21, 1993, between Hartz Mountain
                                    Associates and the Company.(4)

                  10.9              Lease, dated June 1, 1993, between 512 Seventh Avenue Associates
                                    ("512") and the Company.(5)

                  10.10             Lease, dated January 31, 1994, between 512 and the Company.(6)

                  10.11             G-III Apparel Group, Ltd. 1989 Stock Option Plan, as amended.(5)

                  10.12             G-III Apparel Group, Ltd. Stock Option Plan for Non-Employee
                                    Directors.(3)

                  10.13             Limited Liability Company Agreement of BET STUDIO LLC, dated
                                    April 11, 1997, between G-III Leather Fashions,  Inc. and Black
                                    Entertainment Television, Inc.(7)

                  10.14             G-III Apparel Group, Ltd. 1997 Stock Option Plan.(9)

                  10.15             Letter Agreement, dated October 31, 1998, between the Company and
                                    Alan Feller.(12)

                  10.16             Letter Agreement, dated December 2, 1998, between the Company
                                    and Aron Goldfarb.

                  21                Subsidiaries of the Company.

                  23                Consent of Grant Thornton LLP, dated April 13, 1999.

                  27                Financial Data Schedule Article 5.

                  27.1              Restated Financial Data Schedule Article 5, Year ended January 31,
                                    1998.
</TABLE>



                                      -29-






<PAGE>


<PAGE>



<TABLE> 
    <S>      <C>
                  27.2              Restated Financial Data Schedule Article 5, Year ended January 31,
                                    1997.

         (b)      Reports on Form 8-K:

                  None.
</TABLE>


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

1        Previously filed as an exhibit to the Company's Registration
         Statement on Form S-1 (no. 33-31906), which exhibit is incorporated
         herein by reference.

2        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended July 31, 1989, which exhibit is
         incorporated herein by reference.

3        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended July 31, 1991, which exhibit is
         incorporated herein by reference.

4        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended July 31, 1992, which exhibit is
         incorporated herein by reference.

5        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended January 31, 1994, which exhibit is
         incorporated herein by reference.

6        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended January 31, 1995, which exhibit is
         incorporated herein by reference.

7        Previously filed as an exhibit to the Company's Annual Report on Form
         10-K for the fiscal year ended January 31, 1997, which exhibit is
         incorporated herein by reference.

8        Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the fiscal quarter ended April 30, 1997, which exhibit is
         incorporated herein by reference.

9        Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the fiscal quarter ended July 31,1997, which exhibit is
         incorporated herein by reference.

10       Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the fiscal quarter ended Apri1 30, 1998, which exhibit is
         incorporated herein by reference.

11       Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the fiscal quarter ended July 31, 1998, which exhibit is
         incorporated herein by reference.

12       Previously filed as an exhibit to the Company's Quarterly Report on
         Form 10-Q for the fiscal quarter ended October 31,1998, which exhibit
         is incorporated herein by reference.


                                      -30-






<PAGE>


<PAGE>




         Exhibits have been included in copies of this Report filed with the
Securities and Exchange Commission. The Company will provide, without charge, a
copy of these exhibits to each stockholder upon the written request of any such
stockholder therefor. All such requests should be directed to G-III Apparel
Group, Ltd., 512 Seventh Avenue, 35th floor, New York, New York 10018,
Attention: Mr. Wayne S. Miller, Secretary.


                                      -31-




<PAGE>


<PAGE>



                                   SIGNATURES

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

                                       G-III APPAREL GROUP, LTD.

                                       By /s/ MORRIS GOLDFARB
                                          -------------------------------
                                              Morris Goldfarb,
                                              Chief Executive Officer

April 28, 1999

                  Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

             Signature                                  Title                                      Date
             ---------                                  -----                                      ----
<S>                               <C>                                                      <C>
/s/ MORRIS GOLDFARB                  Director, Co-Chairman of the Board and                    April 28, 1999
- --------------------------------     Chief Executive Officer (principal executive
Morris Goldfarb                      officer)

/s/ WAYNE S. MILLER                  Senior Vice President and Chief Financial                 April 28, 1999
- --------------------------------     Officer (principal financial and accounting
Wayne S. Miller                      officer)

/s/ ARON GOLDFARB                    Director and Co-Chairman of the Board                     April 28, 1999
- --------------------------------
Aron Goldfarb

                                     Director                                                  April   , 1999
- --------------------------------
Lyle Berman

/s/ THOMAS J. BROSIG                 Director                                                  April 28, 1999
- --------------------------------
Thomas J. Brosig

/s/ ALAN FELLER                      Director                                                  April 28, 1999
- --------------------------------
Alan Feller

/s/ CARL KATZ                        Director                                                  April 28, 1999
- --------------------------------
Carl Katz

/s/ WILLEM VAN BOKHORST              Director                                                  April 28, 1999
- --------------------------------
Willem van Bokhorst

/s/ SIGMUND WEISS                    Director                                                  April 28, 1999
- --------------------------------
Sigmund Weiss

                                     Director                                                  April   , 1999
- --------------------------------
George J. Winchell
</TABLE>



                                      -32-



<PAGE>


<PAGE>




                            G-III Apparel Group, Ltd.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES
                                  (ITEM 14(a))


<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>                                                                             <C>

Report of Independent Certified Public Accountants                                  F-2

Financial Statements

     Consolidated Balance Sheets - January 31, 1999 and 1998                        F-3

     Consolidated Statements of Operations - Years Ended
        January 31, 1999, 1998 and 1997                                             F-4

     Consolidated Statement of Stockholders' Equity - Years
        Ended January 31, 1997, 1998 and 1999                                       F-5

     Consolidated Statements of Cash Flows - Years Ended 
        January 31, 1999, 1998 and 1997                                             F-6

     Notes to Consolidated Financial Statements                                 F-8 - F-29

Financial Statement Schedules

     II - Valuation and Qualifying Accounts                                         S-1

</TABLE>





All other schedules for which provision is made in the applicable regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and, accordingly, are omitted.


                                      F-1






 


<PAGE>


<PAGE>





               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
    G-III APPAREL GROUP, LTD.

We have audited the accompanying consolidated balance sheets of G-III Apparel
Group, Ltd. and subsidiaries as of January 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended January 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of G-III Apparel
Group, Ltd. and subsidiaries as of January 31, 1999 and 1998, and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended January 31, 1999, in conformity with
generally accepted accounting principles.

We have also audited Schedule II of G-III Apparel Group, Ltd. and subsidiaries
for each of the three years in the period ended January 31, 1999. In our
opinion, this schedule presents fairly, in all material respects, the
information required to be set forth therein.





GRANT THORNTON LLP

New York, New York
April 13, 1999




                                      F-2





 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                   January 31,
               (in thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                     ASSETS                                                1999                   1998
                                                                                        --------                ------
<S>                                                                                     <C>                     <C>
CURRENT ASSETS
    Cash and cash equivalents                                                           $  7,241                $  5,842
    Accounts receivable                                                                   12,280                  12,664
    Allowance for doubtful accounts and sales discounts                                   (1,667)                 (1,247)
    Inventories                                                                           16,355                  20,232
    Prepaid income taxes                                                                     767                   -    
    Prepaid expenses and other current assets                                                935                   1,758
                                                                                        --------                 -------
           Total current assets                                                           35,911                  39,249

PROPERTY, PLANT AND EQUIPMENT, NET                                                         3,777                   3,431

DEFERRED INCOME TAXES                                                                      3,615                   3,125

OTHER ASSETS                                                                               1,567                     941
                                                                                         -------                --------
                                                                                         $44,870                 $46,746
                                                                                          ======                  ======


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Notes payable                                                                       $  2,712                $  3,478

    Current maturities of obligations under capital leases                                   181                     256
    Income taxes payable                                                                   -                         973
    Accounts payable                                                                       2,605                   2,570
    Accrued expenses                                                                       2,631                   2,138
    Accrued nonrecurring charges                                                             545                     538
                                                                                        --------                --------
           Total current liabilities                                                       8,674                   9,953

OTHER LONG-TERM LIABILITIES                                                                  621                     806

MINORITY INTEREST                                                                          -                         301

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Preferred stock; 1,000,000 shares authorized; no shares
       issued and outstanding in all periods
    Common stock - $.01 par value; authorized, 20,000,000 shares; issued and
       outstanding, 6,717,921 and 6,506,276
       shares on January 31, 1999 and 1998, respectively                                      67                      65
    Additional paid-in capital                                                            24,767                  23,700
    Retained earnings                                                                     10,741                  11,921
                                                                                          ------                  ------
                                                                                          35,575                  35,686
                                                                                          ------                  ------
                                                                                         $44,870                 $46,746
                                                                                          ======                  ======
</TABLE>


The accompanying notes are an integral part of these statements.


                                      F-3





 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                      Year ended January 31,
                                                                          -------------------------------------------------
                                                                            1999                 1998                1997
                                                                          --------             --------            --------

<S>                                                                       <C>                  <C>                 <C>     
Net sales                                                                 $121,644             $120,136            $117,645
Cost of goods sold                                                          95,393               91,559              88,057
                                                                          --------             --------            --------

         Gross profit                                                       26,251               28,577              29,588

Selling, general and administrative expenses                                27,235               23,787              23,542
                                                                          --------             --------            --------

         Operating profit                                                     (984)               4,790               6,046

Interest and financing charges, net                                          2,115                1,534               2,075
                                                                         ---------            ---------           ---------

         Income (loss) before minority interest
           and income taxes                                                 (3,099)               3,256               3,971

Minority interest in loss of joint venture                                   1,378                  449        
                                                                         ---------           ----------           ---------

         Income (loss) before income taxes                                  (1,721)               3,705               3,971

Income taxes                                                                  (541)                 906                 885
                                                                        ----------           ----------          ----------

         NET INCOME (LOSS)                                              $   (1,180)          $    2,799          $    3,086
                                                                         =========            =========           =========



INCOME (LOSS) PER COMMON SHARE:

    Basic:
        Net income (loss) per common share                            $       (.18)        $        .43        $        .48
                                                                       ===========          ===========         ===========

        Weighted average number of shares outstanding                        6,539                6,487               6,469
                                                                        ==========            =========           =========

    Diluted:
        Net income (loss) per common share                            $       (.18)        $        .40        $        .46
                                                                       ===========          ===========         ===========

        Weighted average number of shares outstanding                        6,539                7,051               6,739
                                                                         =========            =========           =========

</TABLE>




The accompanying notes are an integral part of these statements.



                                      F-4






 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                   Years ended January 31, 1997, 1998 and 1999
                                 (in thousands)



<TABLE>
<CAPTION>
                                                                      Additional
                                                   Common               paid-in             Retained
                                                    stock               capital             earnings              Total
                                                   -------            ----------            --------            --------

<S>                                                <C>               <C>                   <C>                   <C>
Balance as of January 31, 1996                       $65                $23,615            $   6,036             $29,716

Employee stock options exercised                                             23                                       23
Net income for the year                                                                        3,086               3,086
                                                    ----             ----------             --------            --------

Balance as of January 31, 1997                        65                 23,638                9,122              32,825

Employee stock options exercised                                             62                                       62
Net income for the year                                                                        2,799               2,799
                                                    ----            -----------              -------             -------

Balance as of January 31, 1998                        65                 23,700               11,921              35,686

Employee stock options exercised                       2                    439                                      441
Tax benefit from exercise of options                                        420                                      420
Disgorgement of stock sales profit by
    certain officers                                                        208                                      208
Net loss for the year                                                                         (1,180)             (1,180)
                                                    ----            -----------              -------             -------

BALANCE AS OF JANUARY 31, 1999                       $67                $24,767              $10,741             $35,575
                                                      ==                 ======               ======              ======


</TABLE>






The accompanying notes are an integral part of this statement.

                                      F-5





 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


<TABLE>
<CAPTION>

                                                                                      Year ended January 31,
                                                                              ---------------------------------------------
                                                                               1999              1998                1997
                                                                              ------           --------             -------

<S>                                                                          <C>              <C>                  <C>
Cash flows from operating activities
    Net income (loss)                                                        $(1,180)         $   2,799            $  3,086
                                                                              ------           --------             -------
    Adjustments to reconcile net income (loss) to
      net cash provided by (used in) operating activities
        Depreciation and amortization                                          1,372              1,227               1,534
        Minority interest                                                     (1,378)               449
        Deferred income tax benefit                                             (548)              (294)             (1,634)
        Loss on disposition of fixed assets                                                                             179
        Changes in operating assets and liabilities
           Accounts receivable                                                   804             (4,241)              1,819
           Inventories                                                         3,877             (6,246)                221
           Income taxes                                                       (1,740)               526                 949
           Prepaid expenses and other current assets                             823               (789)                 (1)
           Deferred income taxes                                                  58                520
           Other assets                                                         (626)                35                 (49)
           Accounts payable and accrued expenses                                 855               (460)               (177)
           Accrued nonrecurring charge                                           (73)               (69)
           Other long-term liabilities                                            67                 57         
                                                                              ------          ---------             -------

                                                                               3,491             (9,285)              2,841
                                                                              ------          ---------             -------

         Net cash provided by (used in) operating activities                   2,311             (6,486)              5,927
                                                                              ------          ---------             -------

Cash flows from investing activities
    Capital expenditures                                                      (1,723)            (1,304)               (507)
    Capital dispositions                                                           5                 56                  88
    Investment in joint venture by Minority Partner                              750                750
                                                                              ------          ---------             -------

         Net cash used in investing activities                                  (968)              (498)               (419)
                                                                              ------          ---------             -------

</TABLE>



                                      F-6







 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                 (in thousands)



<TABLE>
<CAPTION>

                                                                                        Year ended January 31,
                                                                              ---------------------------------------------
                                                                               1999              1998                 1997
                                                                              ------           --------              ------
<S>                                                                         <C>               <C>                   <C>
Cash flows from financing activities
    Increase (decrease) in notes payable, net                               $   (766)         $      19             $   479
    Payments for capital lease obligations                                      (247)              (322)               (560)
    Proceeds from exercise of stock options                                      441                 62                  23
    Tax benefit from exercise of options                                         420
    Disgorgement of stock sales profit by certain officers                       208                            
                                                                              ------           --------              ------

       Net cash provided by (used in) financing activities                        56               (241)                (58)
                                                                              ------           --------              ------

       NET INCREASE (DECREASE) IN CASH
          AND CASH EQUIVALENTS                                                 1,399             (7,225)              5,450

Cash and cash equivalents at beginning of year                                 5,842             13,067               7,617
                                                                              ------           --------              ------

Cash and cash equivalents at end of year                                     $ 7,241          $   5,842             $13,067
                                                                              ======           ========              ======


Supplemental disclosures of cash flow information:
 Cash paid during the year for:
       Interest                                                              $ 2,343          $   1,520            $  2,047
       Income taxes                                                          $ 1,355                517               1,836


</TABLE>





The accompanying notes are an integral part of these statements.


                                      F-7






 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                         January 31, 1999, 1998 and 1997

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

     A summary of the significant accounting policies consistently applied in
     the preparation of the accompanying consolidated financial statements
     follows:

     1.  Business Activity and Principles of Consolidation

         As used in these financial statements, the term "Company" refers to
         G-III Apparel Group, Ltd. and its majority-owned subsidiaries. The
         Company designs, manufactures, imports, and markets an extensive range
         of leather and textile apparel which is sold to retailers throughout
         the United States. The Company also operates two retail outlet stores.

         The Company consolidates the accounts of all its majority-owned
         subsidiaries. All material intercompany balances and transactions have
         been eliminated.

         Certain reclassifications have been made to conform to the fiscal 1999
         presentation.

     2.  Revenue Recognition

         Sales are recognized when merchandise is shipped.

     3.  Inventories

         Inventories are stated at the lower of cost (determined by the weighted
         average method, which approximates the first-in, first-out method) or
         market.

     4.  Depreciation and Amortization

         Depreciation and amortization are provided by straight-line methods in
         amounts sufficient to relate the cost of depreciable assets to
         operations over their estimated service lives.

                                      F-8





 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997



NOTE A (CONTINUED)

         The following are the estimated lives of the Company's fixed assets:


<TABLE>
                    <S>                                                       <C>
                      Machinery and equipment                                 5 to 7 years
                      Transportation equipment                                5 years
                      Furniture and fixtures                                  5 years
                      Computer equipment                                      2 to 5 years
                      Building                                                20 years
</TABLE>


         Leasehold improvements are amortized over the lives of the respective
         leases or the service lives of the improvements, whichever is shorter.

         The Company annually evaluates the carrying value of its long-lived
         assets to determine whether changes have occurred that would suggest
         that the carrying amount of such assets may not be recoverable based on
         the estimated future undiscounted cash flows of the businesses to which
         the assets relate. Any impairment loss would be equal to the amount by
         which the carrying value of the assets exceeded its fair value.

     5.  Income Taxes

         Deferred income tax assets reflect the 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.

     6.  Cash Equivalents

         The Company considers all highly liquid debt instruments purchased with
         a maturity of three months or less to be cash equivalents.

     7.  Joint Ventures

         In fiscal 1995, the Company entered into a joint venture agreement with
         a Chinese entity principally to operate a factory located in the
         People's Republic of China. The Company invested $542,000 to obtain a
         39% interest in the joint venture company. The joint venture company
         has an initial term of twenty years. The Company accounts for the joint
         venture operations, which are not material, using the equity method of
         accounting.


                                      F-9





 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997



NOTE A (CONTINUED)

         In 1997, the Company formed a joint venture with Black Entertainment
         Television, Inc. ("BET") to produce a BET-branded clothing and
         accessory line. The joint venture agreement provides for the Company
         and BET each to make an initial capital contribution in the amount of
         $1,000,000. In addition, the agreement provides for the Company and BET
         each to make an additional capital contribution up to $1,000,000. As of
         January 31, 1999, BET and the Company have each contributed $1,500,000
         to this joint venture. The Company has a 50.1% ownership interest in
         the joint venture and includes the results of the joint venture less
         the share of the minority interest in its consolidated financial
         statements.

     8.  Net Income (Loss) Per Common Share

         Basic earnings per share amounts have been computed using the weighted
         average number of common shares outstanding during each year. Diluted
         earnings per share amounts have been computed using the weighted
         average number of common shares and the dilutive potential common
         shares outstanding during the year.

         A reconciliation between basic and diluted earnings per share is as
follows:


<TABLE>
<CAPTION>
                                                                             Years ended January 31,
                                                                     ----------------------------------------
                                                                       1999             1998           1997
                                                                     -------           -------        -------
                                                                     (in thousands, except per share amounts)

<S>                                                                  <C>               <C>            <C>   
              Net income (loss)                                      $(1,180)          $2,799         $3,086
                                                                      ======            =====          =====

              Basic EPS:
                  Basic common shares                                  6,539            6,486          6,469
                                                                      ======            =====          =====

                  Basic EPS                                            $(.18)            $.43           $.48
                                                                        ====              ===            ===

              Diluted EPS:
                  Basic common shares                                  6,539            6,486          6,469
                  Plus impact of stock options                         -                  565            270
                                                                     -------           ------         ------

                  Diluted common shares                                6,539            7,051          6,739
                                                                      ======            =====          =====

                  Diluted EPS                                          $(.18)            $.40           $.46
                                                                        ====              ===            ===

</TABLE>



                                      F-10







 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997



NOTE A (CONTINUED)

         Excluded from the above calculations are 1,042,000 and 50,000, of stock
         options which were deemed to be antidilutive for the years ended
         January 31, 1999 and 1998, respectively. For the year ended January 31,
         1997, no stock options were deemed to be antidilutive.

     9.  Stock-Based Compensation

         The Company grants stock options for a fixed number of shares to
         employees and directors with an exercise price equal to or greater than
         the fair value of the shares at the date of grant. The Company has
         adopted the disclosure-only provision of SFAS No. 123, "Accounting for
         Stock-Based Compensation," which permits the Company to account for
         stock option grants in accordance with APB Opinion No. 25, "Accounting
         for Stock Issued to Employees." Accordingly, the Company recognizes no
         compensation expense for the stock option grants.

    10.  Use of Estimates

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

    11.  Fair Value of Financial Instruments

         Based on borrowing rates currently available to the Company for bank
         loans with similar terms and maturities, the fair value of the
         Company's short-term debt approximates the carrying value. Furthermore,
         the carrying value of all other financial instruments potentially
         subject to valuation risk (principally consisting of cash, accounts
         receivable and accounts payable) also approximates fair value.




                                      F-11




 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997



NOTE A (CONTINUED)

    12.  Foreign Currency Translation

         The financial statements of subsidiaries outside the United States
         other than Indonesia are measured using the local currency as the
         functional currency. Assets and liabilities are translated at the rates
         of exchange at the balance sheet date. The effect of this translation
         for the periods presented is not significant. Income and expense items
         are translated at average monthly rates of exchange. Gains and losses
         from foreign currency transactions of these subsidiaries are included
         in net earnings.

         The financial statements of the Indonesian subsidiary use the U.S.
         dollar as the functional currency and have certain transactions
         denominated in a local currency which are remeasured as if the
         functional currency were the U.S. dollar. The remeasurement of local
         currencies into U.S. dollars creates translation adjustments which are
         included in net income. Exchange gains and losses in 1999, 1998, and
         1997 resulting from foreign currency transactions, including those
         resulting from foreign currency translation losses, have not been
         significant and are included in the respective statements of income.

NOTE B - INVENTORIES

     Inventories consist of:


<TABLE>
<CAPTION>

                                              January 31,
                                     ----------------------------
                                      1999               1998
                                     -------              -------
                                    ----------(000's)------------

<S>                                  <C>                  <C>    
      Finished goods                 $12,939              $14,137
      Work-in-process                    115                    1
      Raw materials                    3,301                6,094
                                     -------              -------

                                     $16,355              $20,232
                                      ======               ======

</TABLE>




                                      F-12






 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997



NOTE C - PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment at cost consist of:


<TABLE>
<CAPTION>

                                                                                      January 31,
                                                                             ----------------------------
                                                                               1999               1998
                                                                             --------            --------
                                                                             ----------(000's)------------

<S>                                                                          <C>                 <C>     
      Machinery and equipment                                                $  1,253            $  1,348
      Leasehold improvements                                                    4,354               4,253
      Transportation equipment                                                    128                  97
      Furniture and fixtures                                                    1,621               1,295
      Computer equipment                                                        4,423               3,535
      Land and building (net of write-down of Indonesian
          factory; Note E)                                                        186                  25
      Property under capital leases (Note E)
          Land                                                                     55                  55
          Building                                                                185                 185
          Computer equipment                                                       74                  52
          Leasehold improvement                                                   650                 650
                                                                             --------            --------

                                                                               12,929              11,495

      Less accumulated depreciation and amortization (including $823,000 and
          $654,000 on property under capital leases at January 31, 1999 and
          1998, respectively)                                                   9,152               8,064
                                                                              -------             -------

                                                                             $  3,777            $  3,431
                                                                              =======             =======

</TABLE>



                                      F-13






 


<PAGE>


<PAGE>



                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997




NOTE D - NOTES PAYABLE

     Notes payable include foreign notes payable by PT Balihides, the
     Company's Indonesian subsidiary. The foreign notes payable represent
     maximum borrowings under a line of credit of approximately $1.5 million
     and $3.5 million with an Indonesian bank, as of January 31, 1999 and 1998,
     respectively.

     In connection with the joint venture agreement with Black Entertainment
     Television, Inc. ("BET"), the joint venture has an asset based credit
     facility with The CIT Group. To support the requirement for overadvances
     which occur when the available collateral is not sufficient to support the
     level of direct bank debt and letters of credit opened to pay for product,
     both partners have opened standby letters of credit in the amount of
     $750,000 under which The CIT Group is the beneficiary. Direct borrowings
     bear interest at the prevailing prime rate plus 50 basis points (8.25% at
     April 13, 1999). As of January 31, 1999, there were $1.2 million of direct
     borrowings and $360,000 of contingent liability under open letters of
     credit.

     The Company's loan agreement, which expires May 31, 1999, is a
     collateralized working capital line of credit with three banks that
     provides for a maximum line of credit in amounts that range from $40
     million to $63.5 million at specific times during the year. The line of
     credit provides for maximum direct borrowings ranging from $30 million to
     $50 million during the year. The unused balance may be used for letters of
     credit. Amounts available for borrowing are subject to borrowing base
     formulas and overadvances specified in the agreement.

     All borrowings under the agreement are payable on demand and bear interest
     at the option of the Company at either the prevailing prime rate (7.75% at
     April 13, 1999) or LIBOR plus 250 basis points (7.43% at April 13, 1999)
     and are collateralized by the assets of the Company. The loan agreement
     requires the Company, among other covenants, to maintain certain earnings
     and tangible net worth levels, and prohibits the payment of cash dividends.

     The weighted average interest rates were 8.4% and 8.5% as of January 31,
     1999 and 1998, respectively.

     At January 31, 1999 and 1998, the Company was contingently liable under
     letters of credit in the amount of approximately $3,800,000 and $6,800,000,
     respectively.

                                      F-14







<PAGE>


<PAGE>

                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE E - OTHER LIABILITIES

     Other long-term liabilities consist of:


<TABLE>
<CAPTION>
                                                   January 31,
                                               -------------------
                                               1999           1998
                                               ----           ----
                                             --------(000's)--------
          <S>                                  <C>            <C> 
          Nonrecurring charges                 $317           $397
          Capital lease obligations             180            352
          Other                                 124             57
                                               ----           ----
                                               $621           $806
                                               ====           ====
</TABLE>



     Nonrecurring Charges

     During 1995, the Company formulated plans to close its domestic
     manufacturing facility, to sell or liquidate a factory located in
     Indonesia, to reduce costs and to streamline and consolidate operations.
     The domestic factory was closed during 1995 with no loss of revenue. During
     fiscal 1998, the Company applied approximately $1.6 million of the reserve
     as a reduction of the Indonesian property, plant and equipment, since the
     Company cannot assure any recoveries in connection with a disposition of
     the factory. In December 1997, the Company was approached by an outside
     third party to manufacture luggage at the Indonesian factory. The Company
     began producing luggage in February 1998. As a result the Company
     discontinued its plan to close the factory.

     At January 31, 1999, a portion of the nonrecurring charge balance
     ($462,000) relates to the uncertainty of the realization of the assets in
     Indonesia caused by the instability of the Indonesian economy (Note P).

     Based on current estimates, management believes that existing accruals are
     adequate to cover the items presented below.


                                      F-15






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE E (CONTINUED)

     The status of the components of the nonrecurring charges was:


<TABLE>
<CAPTION>
                                              Balance at         Current           BALANCE AT
                                              January 31,         period           JANUARY 31,
                                                 1998            activity             1999
                                                 ----            --------             ----
                                              --------------------(000's)-------------------
          <S>                                   <C>               <C>               <C>  
          Closure of domestic facility          $ 473             $ (73)            $ 400
          Uncertainty of Indonesian assets        462              -                 462
                                                -----             -----             -----
                                                $ 935             $ (73)            $ 862
                                                =====             =====             =====
</TABLE>



     Capital Lease Obligations

     In September 1986, the New York City Industrial Development Agency
     ("Agency") issued $1,442,000 of floating rate Industrial Development
     Revenue Bonds to a commercial bank for the purpose of acquiring and
     renovating real property located at 345 West 37th Street in New York. The
     bonds bear interest at 92% of the bank's prime rate, which was 7.75% at
     January 31, 1999 plus 1.48% per annum. Simultaneously, the Agency leased
     the property to 345 West 37th Corp. ("345 West"), a company under the
     management and control of two principal stockholders, for 15 years. 345
     West, in turn, subleased the property to G-III Leather Fashions, Inc.
     ("G-III"), a subsidiary of the Company, on the same terms. Concurrent with
     the execution of the lease and sublease agreements, 345 West and G-III
     entered into lease guarantee agreements whereby they jointly and severally
     guaranteed the payments and obligations under the lease and the payment of
     principal and interest on the bonds. In addition, the two principal
     stockholders of the Company have personally guaranteed the debt. The
     accompanying financial statements reflect the above lease between G-III and
     345 West as a capitalized lease (Note J).

     In fiscal 1995, the Company entered into several agreements for the sale
     and leaseback of the renovations of its showroom and warehouse and the
     computer system installed for the retail stores. The assets were sold for
     $1,548,000 (the book value of the assets). The sale and leaseback
     transactions have been accounted for as a capital lease, wherein the
     property remains on the books and will continue to be depreciated. A
     financing obligation representing the proceeds has been recorded. The
     Company has the option to purchase these assets at the end of the leases.


                                      F-16






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE E (CONTINUED)

     In addition, certain equipment leases have been treated as capital leases.
     The present values of minimum future obligations are calculated based on
     interest rates at the inception of the leases. The following schedule sets
     forth the future minimum lease payments under capital leases at January 31,
     1999:


<TABLE>
<CAPTION>
                                                         (000's)
          <S>                                             <C>
          Year ending January 31,
              2000                                        $198
              2001                                         124
              2002                                          75
                                                          ----
          Net minimum lease payments                       397

          Less amount representing interest                 36
                                                          ----
          Present values of minimum lease payments        $361
                                                          ====
          Current portion                                 $181
          Noncurrent portion                               180
                                                          ----
                                                          $361
                                                          ====
</TABLE>



                                      F-17






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE F - INCOME TAXES

     The income tax provision (benefit) is comprised of the following:


<TABLE>
<CAPTION>
                                                                     Year ended January 31,
                                                       ---------------------------------------------------
                                                          1999                1998                1997
                                                         -------             -------             -------
                                                       ----------------------(000's)----------------------
          <S>                                            <C>                 <C>                 <C> 
          Current
              Federal                                    $   (52)            $ 1,044             $ 2,370
              State and city                                  45                  68                  73
              Foreign                                         14                  88                  76
                                                         -------             -------             -------
                                                               7               1,200               2,519

          Deferred                                          (548)               (294)             (1,634)
                                                         -------             -------             -------
                                                         $  (541)            $   906             $   885
                                                         =======             =======             =======

          Earnings (loss) before income taxes
              United States                              $(3,335)            $ 3,358             $ 4,912
              Non-United States                            1,614                 347                (941)
</TABLE>



                                      F-18






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE F (CONTINUED)

     The significant components of the Company's deferred tax asset at January
     31, 1999 and 1998 are summarized as follows:


<TABLE>
<CAPTION>
                                                                   1999                1998
                                                                  -------             -------
                                                                ------------(000's)------------
          <S>                                                     <C>                 <C>    
          Provision for bad debts and sales allowances            $   639             $   237
          Depreciation                                              1,293               1,320
          Inventory write-downs                                       647                 345
          Nonrecurring charges                                        978               1,058
          Straight-line lease                                         102                 168
          Other                                                       (44)                 (3)
                                                                  -------             -------
                                                                  $ 3,615             $ 3,125
                                                                  =======             =======
</TABLE>



     Due to changes in economic circumstances in fiscal 1998, the Company
     assessed its past earnings history and trends and evaluated its anticipated
     profitability over the period of years in which the temporary differences
     are expected to become tax deductions. During the year ended January 31,
     1998, management reduced the allowance by $388,000 to an amount at which it
     believes sufficient taxable income will be generated to realize the net
     deferred tax assets.

     At January 31, 1999, the Company has state and local net operating loss
     carryforwards of approximately $2,000,000, which will be available to
     offset its earnings during the carryforward period. If not used, these
     carryforwards begin to expire in 2010.


                                      F-19






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE F (CONTINUED)

     The following is a reconciliation of the statutory Federal income tax rate
     to the effective rate reported in the financial statements:


<TABLE>
<CAPTION>
                                                            YEAR ENDED              Year ended              Year ended
                                                         JANUARY 31, 1999        January 31, 1998        January 31, 1997
                                                        -------------------     -------------------     -------------------
                                                                    PERCENT                 Percent                 Percent
                                                                       OF                      of                      of
                                                        AMOUNT       INCOME     Amount       income     Amount       income
                                                        ------      -------     ------      -------     ------      -------
                                                        (000'S)                 (000's)                 (000's)

<S>                                                      <C>         <C>        <C>           <C>       <C>           <C>
Provision (benefit) for Federal income taxes at
   the statutory rate                                    $(585)      (34.0)%    $1,263        34.0%     $1,350        34.0%
State and city income taxes, net of Federal
   income tax benefit                                       30         1.7          45         1.2          48         1.2
Effect of foreign taxable operations                      (535)      (31.1)        (34)        (.9)        397        10.0
Valuation allowance for deferred taxes                      -           -         (388)      (10.4)       (912)      (22.9)
Effect of temporary differences resulting in
  Federal taxable income                                   624        36.3
Tax refund of prior years                                  (58)       (3.4)

Other, net                                                 (17)        (.9)         20          .6           2
                                                         -----       ------     ------        ----      ------        ----
Actual provision (benefit) for income taxes              $(541)      (31.4)%    $  906        24.5%     $  885        22.3%
                                                         =====       ======     ======        ====      ======        ====
</TABLE>



                                      F-20






<PAGE>


<PAGE>


                                G-III Apparel Group, Ltd. and Subsidiaries

                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                     January 31, 1999, 1998 and 1997


NOTE G - COMMITMENTS AND CONTINGENCIES

     The Company leases warehousing, executive and sales facilities, and
     transportation equipment. Leases with provisions for increasing rents have
     been expensed and accrued for on a straight-line basis over the life of the
     lease. Future minimum rental payments for operating leases having
     noncancellable lease periods in excess of one year as of January 31, 1999
     are:


<TABLE>
<CAPTION>
                                  Sublease
                     Gross        income          Net
                    -------       -------       -------
                    --------------(000's)--------------
          <S>       <C>           <C>           <C>
     Year ending January 31,
          2000      $ 2,192       $  (961)      $ 1,231
          2001          768          (254)          514
          2002          600          (115)          485
          2003          600          (119)          481
          2004          -             (10)          (10)
                    -------       -------       -------
                    $ 4,160       $(1,459)      $ 2,701
                    =======       =======       =======
</TABLE>



     Rent expense on the above operating leases (including amounts leased from
     345 West - Note J) for the years ended January 31, 1999, 1998 and 1997 was
     approximately $1,631,000, $1,624,000 and $1,570,000, respectively, net of
     sublease income of $775,000, $744,000 and $702,000, respectively.

     In April 1988, 345 West received a loan from the New York Job Development
     Authority ("Authority") to assist 345 West in its renovation of the 345
     West property. The loan is for a period of 15 years and is presently
     repayable in monthly installments of $11,000, which includes interest at a
     variable rate (8.25% at January 31, 1999). The loan is financed by
     long-term bonds issued by the Authority. G-III and the two principal
     stockholders of the Company have signed corporate and personal guarantees
     for this loan. The outstanding principal of this debt was approximately
     $481,000 and $572,000 as of January 31, 1999 and 1998, respectively. In
     conjunction with closing this domestic facility (described in Note E), the
     Company has reflected $400,000 and $473,000 of the balance of the loan as
     an accrued nonrecurring charge at January 31, 1999 and 1998, respectively.


                                      F-21






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE G (CONTINUED)

     The Company has entered into royalty agreements that provide for royalty
     payments from 5% to 12% of net sales of licensed products. The Company
     incurred royalty expense (included in cost of goods sold) of approximately
     $4,689,000, $3,188,000 and $2,585,000 for the years ended January 31, 1999,
     1998 and 1997, respectively. Based on minimum sales requirements, future
     minimum royalty payments required under these agreements are:


<TABLE>
<CAPTION>

                      Year ending January 31,         Amount
                      -----------------------       ----------
                      <S>                           <C>
                          2000                      $1,276,000
                          2001                       1,413,000
                                                    ----------
                                                    $2,689,000
                                                    ==========
</TABLE>



     The Company has an employment agreement with its chief executive officer
     which expires on January 31, 2000. The agreement is automatically renewed
     for successive one-year terms, unless either party shall give the other not
     less than 90 days' prior written notice of intent not to renew. The
     agreement provides for a base salary and bonus payments that vary between
     3% and 6% of pretax income in excess of $2 million. If, after a change in
     control of the Company, as defined in the agreement, the chief executive
     officer's employment is terminated: (i) by the Company without cause, or
     (ii) by him because of a material breach of the agreement by the Company,
     then the chief executive officer has the right to receive an amount equal
     to 2.99 times his base salary and bonus. The agreement also provides for
     supplemental pension payments of $50,000 per year provided that the Company
     achieves net income, as defined, in excess of $1,500,000.


     Year 2000

     The Year 2000 issue relates to limitations in computer systems and
     applications that may prevent proper recognition of the Year 2000. The
     potential effect of the Year 2000 issue on the Company and its business
     partners will not be fully determinable until the Year 2000 and thereafter.
     If Year 2000 modifications are not properly completed either by the Company
     or entities with which the Company conducts business, the Company's
     revenues and financial condition could be adversely impacted.


                                      F-22






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE H - STOCKHOLDERS' EQUITY

     Certain agreements entered into by the Company in connection with loans by
     the Agency and Authority relating to the building located at 345 West 37th
     Street in New York City and the bank agreements prohibit the payment of
     cash dividends without consent.


     Stock Options

     The Company's stock plans authorize the granting of 1,630,000 options to
     executive and key employees and 31,500 to directors of the Company. It is
     the Company's policy to grant stock options at prices not less than the
     fair market value on the date of the grant. Option terms, vesting and
     exercise periods vary, except that the term of an option may not exceed ten
     years.

     The Company has adopted the disclosure-only provisions of SFAS No. 123,
     "Accounting for Stock Based Compensation." Accordingly, no compensation
     cost has been recognized for the stock options granted to employees and
     directors. Had compensation cost been determined based on the fair value at
     the grant date for stock option awards in 1999, 1998 and 1997 consistent
     with the provisions of SFAS No. 123, the Company's net income (loss) and
     earnings (loss) per share for the years ended January 31, 1999, 1998 and
     1997 would have been as follows:


<TABLE>
<CAPTION>
                                                                    1999            1998            1997
                                                                  --------         ------          ------
          <S>                                                     <C>              <C>             <C>   
          Net income (loss) - as reported                         $(1,180)         $2,799          $3,086
          Net income (loss) - adjusted                             (1,494)          2,569           2,824
          Diluted earnings (loss) per share - as reported           $(.18)           $.40            $.46
          Diluted earnings (loss) per share - adjusted              $(.23)           $.37            $.42
</TABLE>



                                      F-23






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE H (CONTINUED)

     The weighted average fair value at date of grant for options granted during
     1999, 1998 and 1997 was $2.58, $3.19 and $1.93 per option, respectively.
     The fair value of each option at date of grant was estimated using the
     Black-Scholes option pricing model with the following weighted average
     assumptions for grants in 1999, 1998 and 1997, respectively:


<TABLE>
<CAPTION>
                                                                    1999            1998            1997
                                                                  --------         ------          ------
          <S>                                                       <C>             <C>             <C>   
          Expected stock price volatility                           61.8%           68.9%           70.9%
          Expected lives of options
             Directors and officers                                  7 YEARS         7 years         7 years
             Employees                                               6 YEARS         6 years         6 years
          Risk-free interest rate                                    5.4%            6.6%            5.6%
          Expected dividend yield                                    0%              0%              0%
</TABLE>



     Information regarding these option plans for 1999, 1998 and 1997 is as
     follows:


<TABLE>
<CAPTION>
                                                1999                      1998                      1997
                                       ----------------------    ----------------------    -----------------------
                                                     WEIGHTED                  Weighted                  Weighted
                                                      AVERAGE                   average                   average
                                                     EXERCISE                  exercise                  exercise
                                         SHARES        PRICE       Shares        price       Shares        price
                                       ---------     --------    ---------     --------    ---------     --------
          <S>                           <C>            <C>        <C>            <C>        <C>            <C>
          Options outstanding at
            beginning of year          1,133,020       $2.56       989,465       $2.15       888,320       $2.05

          Exercised                     (211,645)       2.08       (38,565)       2.00        (7,020)       2.00
          Granted                        124,150        4.18       199,000        4.54       137,000        2.64
          Cancelled or forfeited          (3,425)       2.00       (16,880)       2.54       (28,835)       2.00
                                       ---------                 ---------                 ---------

          Options outstanding at
            end of year                1,042,100       $2.86     1,133,020        2.56       989,465        2.15
                                       =========                 =========                 =========

          Exercisable                    789,140       $2.47       889,120        2.24       735,252        2.14
                                       =========                 =========                 =========
</TABLE>



                                      F-24






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE H (CONTINUED)

     The following table summarizes information about stock options outstanding:


<TABLE>
<CAPTION>
                                                           Weighted                           Number
                                        Number out-         average         Weighted        exercisable         Weighted
                                      standing as of       remaining         average          as of              average
              Range of                  January 31,       contractual       exercise        January 31,         exercise
          exercise prices                  1999              life             price            1999               price
          ---------------             --------------      -----------       --------        -----------         --------
          <S>                           <C>                <C>               <C>              <C>                 <C>
          $1.625 to $3.00                 768,950          5.4 years         $2.16            670,340             $2.17
          $3.01 to $5.875                 273,150          7.1 years          4.81            118,800              4.18
                                        ---------                                             -------

                                        1,042,100          6.0 years          2.86            789,140              2.47
                                        =========                                             =======
</TABLE>



NOTE I - MAJOR VENDORS AND CUSTOMERS

     For the years ended January 31, 1999, 1998 and 1997, the Company purchased
     13%, 12%, and 11%, respectively, of total purchases through one buying
     agent. The Company believes that alternative foreign leather apparel
     manufacturers are readily available and that the loss of any manufacturer
     or the buying agent would not materially adversely affect the Company's
     operations.

     For the years ended January 31, 1999, 1998 and 1997, one customer accounted
     for 21.6%, 17.1%, and 12.8%, respectively, of the Company's net sales. The
     Company estimates an allowance for doubtful accounts based on the
     creditworthiness of its customers as well as general economic conditions.
     Consequently, an adverse change in those factors could affect the Company's
     estimate.


NOTE J - RELATED PARTY TRANSACTIONS

     During the years ended January 31, 1999, 1998 and 1997, G-III leased space
     from 345 West (Notes E and G). Operating expenses paid by G-III to 345 West
     during the years ended January 31, 1999, 1998 and 1997, amounted to
     approximately $200,000, $229,000 and $182,000, respectively.


                                      F-25






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE J (CONTINUED)

     An executive of the Company owns approximately 20% of equity interest on a
     fully diluted basis in Wilsons the Leather Experts Inc. ("Wilsons"), a
     customer of the Company. In addition, an outside director of the Company
     owns approximately 3% directly and 17% indirectly of equity interests on a
     fully diluted basis of Wilsons. During the years ended January 31, 1999,
     1998 and 1997, Wilsons accounted for approximately $8,183,000, $7,121,000
     and $6,741,000, respectively, of the Company's net sales. Accounts
     receivable from Wilsons at January 31, 1999 and 1998 were approximately
     $64,000 and $286,000, respectively.


NOTE K - PENSION PLANS

     The Company maintains a 401(k) profit-sharing plan and trust for nonunion
     employees. The Company matches 50% of employee contributions up to 3% of
     the participant's compensation. The Company's matching contributions
     amounted to approximately $150,000, $140,000 and $120,000, for the years
     ended January 31, 1999, 1998 and 1997, respectively.

     G-III contributed approximately $57,000, $45,000 and $37,000 for the years
     ended January 31, 1999, 1998 and 1997, respectively, to a multi-employer
     pension plan for employees covered by a collective bargaining agreement.
     This plan is not administered by G-III and contributions are determined in
     accordance with the provisions of a negotiated labor contract. Information
     with respect to G-III's proportionate share of the excess, if any, of the
     actuarial computed value by vested benefits over the total of the pension
     plan's new assets is not available from the plan's administrator.


                                      F-26






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE L - SEGMENTS

     The Company's reportable segments are business units that offer different
     products and are managed separately. The company operates in two segments,
     licensed and nonlicensed apparel. The following information is presented
     for the fiscal years indicated below:


<TABLE>
<CAPTION>
                                                   1999                      1998                    1997
                                           ---------------------     --------------------    --------------------
                                                          NON-                     Non-                    Non-
                                           LICENSED     LICENSED     Licensed    Licensed    Licensed    Licensed
                                           --------     --------     --------    --------    --------    --------
          <S>                              <C>          <C>          <C>          <C>        <C>          <C>
          Net sales                        $ 45,854     $ 75,790     $ 28,986     $91,150    $ 21,609     $96,036
          Cost of goods sold                 35,257       60,136       23,295      68,264      17,137      70,920
                                           --------     --------     --------     -------    --------     -------
          Gross profit                       10,597       15,654        5,691      22,886       4,472      25,116

          Selling, general and
            administrative                    7,996       19,239        7,039      16,748       4,285      19,257
                                           --------     --------     --------     -------    --------     -------
          Operating profit (loss)             2,601       (3,585)      (1,348)      6,138         187       5,859

          Interest expense                      480        1,635          467       1,067         380       1,695
                                           --------     --------     --------     -------    --------     -------
          Income (loss) before minority
            Interest and income taxes         2,121       (5,220)      (1,815)      5,071        (193)      4,164
          Minority interest                               (1,378)                    (449)
                                           --------     --------     -------    --------     --------     -------
          Income (loss) before income
            taxes                          $  2,121     $ (3,842)    $ (1,815)    $ 5,520    $   (193)    $ 4,164
                                           ========     ========     ========     =======    ========     =======
</TABLE>



     Commission fee income was $3.5 million, $6.7 million, and $10.0 million for
     fiscal 1999, 1998 and 1997, respectively. This fee income is included in
     nonlicensed net sales and gross profit.


<TABLE>
<CAPTION>
                                                    1999                          1998                          1997
                                           -----------------------       -----------------------       -----------------------
                                                        LONG-LIVED                    Long-Lived                    Long-Lived
                                           REVENUES       ASSETS         Revenues       Assets         Revenues       Assets
                                           --------     ----------       --------     ----------       --------     ----------
          <S>                              <C>            <C>            <C>            <C>            <C>            <C>
       Geographic region
            United States                  $118,976       $7,482         $114,584       $6,582         $113,284       $6,893
            Non-United States                 2,668        1,476            5,552          915            4,361        2,460
                                           --------       ------         --------       ------         --------       ------
                                           $121,644       $8,958         $120,136       $7,497         $117,645       $9,353
                                           ========       ======         ========       ======         ========       ======
</TABLE>


     Included in finished goods inventory at January 31, 1999, 1998 and 1997 is
     $5.2 million and $7.8 million, $2.2 million and $11.9 million, and $1.8
     million and $8.6 million, respectively of licensed and non-licensed
     inventory, respectively. All other assets are commingled.




                                      F-27






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE M - QUARTERLY FINANCIAL DATA (UNAUDITED)

     Summarized quarterly financial data in thousands except per share numbers
     for the fiscal years ended January 31, 1999 and 1998 are as follows:


<TABLE>
<CAPTION>

                                                                         Quarter Ended
                                                     -------------------------------------------------------
                                                     April 30,       July 31,     October 31,    January 31,
                                                       1998            1998          1998           1999
                                                     ---------       --------     -----------    -----------
          <S>                                         <C>            <C>            <C>           <C>
          January 31, 1999
             Net Sales                                $ 4,950        $35,742        $61,210       $ 19,742
             Gross Profit                                (298)         9,399         15,258          1,892
             Net Income (loss)                         (3,930)         1,410          4,426         (3,086)

             Net income (loss) per common share
               Basic                                  $ (0.60)       $  0.22        $  0.68       $  (0.47)
               Diluted                                  (0.60)          0.20           0.66          (0.47)


<CAPTION>

                                                                         Quarter Ended
                                                       -------------------------------------------------------
                                                       April 30,      July 31,      October 31,    January 31,
                                                         1997           1997           1997           1998
                                                       ---------       --------     -----------    -----------
          <S>                                         <C>            <C>            <C>           <C>
          January 31, 1998
             Net sales                                $ 6,531        $33,109        $61,125       $ 19,371
             Gross profit                                 462         10,966         15,936          1,213
             Net income (loss)                         (3,248)         2,444          5,656         (2,053)

             Net income (loss) per common share
               Basic                                  $ (0.50)       $  0.38        $  0.87       $  (0.32)
               Diluted                                  (0.50)          0.35           0.80          (0.32)
</TABLE>



NOTE N - FUTURE EFFECTS OF RECENTLY ISSUED
           ACCOUNTING PRONOUNCEMENTS

     Derivatives

     In June 1998, the FASB issued Statement of Financial Accounting Standards
     No. 133 ("SFAS No. 133"), "Accounting for Derivative Instruments and 
     Hedging Activities," which is effective for the Company's fiscal year 
     ending December 31, 2000.  SFAS No. 133 will require the Company to 
     recognize all derivatives on the balance sheet at fair value.  Adoption 
     of SFAS No. 133 is not expected to have a material effect on the Company's
     financial statements.


                                      F-28






<PAGE>


<PAGE>


                   G-III Apparel Group, Ltd. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                         January 31, 1999, 1998 and 1997


NOTE O - COMPREHENSIVE INCOME

     As of February 1, 1998, the Company adopted Statement of Financial
     Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130).
     The adoption of this Statement had no impact on the Company's net income or
     stockholders' equity. This pronouncement sets forth requirements for
     disclosure of the Company's comprehensive income and accumulated other
     comprehensive items. Comprehensive income is defined as the change in
     equity during a period from transactions in other events and circumstances
     unrelated to net income (e.g., foreign currency translation gains and
     losses). For the years ended January 31, 1999, 1998 and 1997, other
     comprehensive income was not material.


NOTE P - EFFECT OF INDONESIAN ECONOMY

     Many Asia/Pacific countries, including Indonesia, are experiencing an
     economic crisis mainly resulting from currency devaluation in the region,
     the principal consequences of which have been an extreme lack of liquidity
     and highly volatile exchange and interest rates. The crisis has also
     involved declining prices in shares listed on the Indonesian stock
     exchanges, tightening of available credit, stoppage or postponement of
     certain construction projects, and a growing oversupply of real property.

     Resolution of the economic crisis is dependent on the fiscal and monetary
     measures that will be taken by the government, actions which are beyond the
     Company's control, to achieve economic recovery. It is not possible to
     determine the future effect a continuation of the economic crisis may have
     on the Company's liquidity and earnings, including the effect flowing
     through from the Company's suppliers. The Company believes it has adequate
     sources of alternative financing and suppliers. The Company has written off
     a substantial portion of the value of the assets located in Indonesia in
     connection with the 1995 restructuring (Note E). The Company believes that
     it has adequately provided for any potential future losses in connection
     with the instability of the Indonesian economy, in all material respects.


                                      F-29






<PAGE>


<PAGE>


                                G-III Apparel Group, Ltd. and Subsidiaries

 
                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
              Column A                     Column B             Column C                Column D       Column E
              --------                     --------             --------                --------       --------
                                                                Additions
                                                         ------------------------
                                                            (1)            (2)
                                          Balance at     Charged to      Charged                      Balance at
                                          beginning      costs and       to other      Deductions       end of
             Description                  of period       expenses       accounts         (a)           period
             -----------                  ----------     ----------     ----------     ----------     ----------
<S>                                         <C>            <C>            <C>            <C>            <C>
Year ended January 31, 1999
    Deducted from asset accounts
       Allowance for doubtful accounts      $  685         $   23                        $  209         $  499
       Allowance for sales discounts           562          2,146                         1,540          1,168
                                            ------         ------                        ------         ------
                                            $1,247         $2,169                        $1,749         $1,667
                                            ======         ======                        ======         ======

Year ended January 31, 1998
    Deducted from asset accounts
       Allowance for doubtful accounts      $1,894         $  177                        $1,386         $  685
       Allowance for sales discounts           800          2,169                         2,407            562
                                            ------         ------                        ------         ------
                                            $2,694         $2,346                        $3,793         $1,247
                                            ======         ======                        ======         ======
Year ended January 31, 1997
    Deducted from asset accounts
       Allowance for doubtful accounts      $1,712         $  216                        $   34         $1,894
       Allowance for sales discounts         1,057          2,222                         2,479            800
                                            ------         ------                        ------         ------
                                            $2,769         $2,438                        $2,513         $2,694
                                            ======         ======                        ======         ======
</TABLE>



(a)  Accounts written off as uncollectible, net of recoveries.


                                       S-1



                       STATEMENT OF DIFFERENCES

The trademark symbol shall be expressed as.................................'TM'
The dagger symbol shall be expressed as.................................... 'D'



<PAGE>










<PAGE>

                                                            EXECUTION COPY

                          AMENDMENT NO. 4 TO THE FOURTH
                       AMENDED AND RESTATED LOAN AGREEMENT

                  THIS AMENDMENT NO. 4 TO THE FOURTH AMENDED AND RESTATED LOAN
AGREEMENT, dated as of March 30, 1999 (this "Amendment"), by and among G-III
LEATHER FASHIONS, INC., a New York corporation (the "Borrower"), the Lenders
that have executed the signature pages hereto (individually, a "Lender" and
collectively, the "Lenders"), and FLEET BANK, N.A., a national banking
association as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent"),

                              W I T N E S S E T H:

                  WHEREAS:

                  A. The Borrower, the Lenders and the Agent are parties to the
Fourth Amended and Restated Loan Agreement, dated as of May 31, 1997, as amended
by Amendment No. 1 to the Fourth Amended and Restated Loan Agreement, dated as
of June 1, 1998, as further amended by Amendment No. 2 to the Fourth Amended and
Restated Loan Agreement, dated as of June 24, 1998, as further amended by
Amendment No. 3 to the Fourth Amended and Restated Loan Agreement, dated as of
July 31, 1998, and as further amended hereby (as it may be further amended,
modified and supplemented from time to time, the "Loan Agreement"); and

                  B. The parties hereto wish to amend the Loan Agreement as
hereinafter provided;

and

                  C. Each
 capitalized term used but not otherwise defined herein
shall have the meaning ascribed thereto in the Loan Agreement;

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

                  SECTION 1. AMENDMENT TO LOAN AGREEMENT.

                  1.1 This Amendment shall be deemed to be an amendment to the
Loan Agreement and shall not be construed in any way as a replacement or
substitution therefor. All of the terms and conditions of, and terms defined in,
this Amendment are hereby incorporated by reference into the Loan Agreement as
if such terms and provisions were set forth in full therein.

                  1.2 The definition of "Overadvance" set forth in Article 1 of
the Loan Agreement shall be amended by deleting the existing definition in its
entirety and replacing it with the following:

                            





<PAGE>


<PAGE>


         "'OVERADVANCE' - the amount set forth below for the period indicated:


<TABLE>
<CAPTION>

                  Period                                          Amount
                  ------                                          ------

                  <S>                                            <C>         
                  July 1, 1998 - July 27, 1998                    $ 30,000,000
                  July 28, 1998 - August 30, 1998                 $ 30,000,000
                  August 31, 1998 - September 27, 1998            $ 25,000,000
                  September 28, 1998 - October 18, 1998           $ 22,000,000
                  October 19, 1998 - October 25, 1998             $ 15,000,000
                  October 26, 1998 - October 31, 1998             $  4,000,000
                  November 1, 1998 - March 21, 1999                   -0-
                  March 22, 1999 - March 31, 1999                 $  8,000,000
                  April 1, 1999 - April 30, 1999                  $ 17,500,000
                  May 1, 1999 - May 31, 1999                      $ 26,000,000
</TABLE>



         ; provided, however, that with respect to the Overadvance at all times
         (x) the then applicable Overadvance amount and all subsequent
         Overadvance amounts shall be reduced by (i) 50% of all tax refunds paid
         to the Borrower or the Parent (or paid to the Collection Account, in
         accordance with the terms hereof), (ii) the proceeds of the sale of any
         assets other than in the ordinary course of business, and (iii) 50% of
         the proceeds of any sale-leaseback, all of such reductions to be
         effective immediately upon the Borrower's receipt (or, if applicable,
         the Collateral Monitoring Agent's receipt for the account of the
         Borrower) of such refunds or proceeds; but there shall be no reduction
         to the then applicable Overadvance amount in the case of any
         sale-leaseback of newly acquired assets, provided that (A) the
         sale-leaseback transaction is closed within 90 days of the acquisition
         of the assets and (B) both the acquisition and the closing of the
         sale-leaseback are completed during the same fiscal year; and (y) at
         any time when Outstanding Obligations have exceeded the Borrowing Base
         as a result of (A) Accounts or Inventory believed to be Eligible
         Accounts or Eligible Inventory, as the case may be, in fact being or
         becoming ineligible or (B) the return of uncollected checks or other
         items applied to reduce Loans, the Collateral Monitoring Agent shall
         have the discretion to continue to advance Loans and to instruct the
         Issuing Bank to issue L/Cs, Acceptances, Steamship Guaranties and
         Airway Releases, as the case may be, up to an amount which would result
         in the relevant Overadvance amount specified above being exceeded by a
         factor of 10% (it being understood that the Collateral Monitoring Agent
         shall advise the Lenders of all such issuances and advances within 24
         hours); and (z) the applicable Overadvance amount shall be increased by
         the amount of (a) any cash collateral held by the Collateral Monitoring
         Agent for the sole purpose of securing such increases to the applicable
         Overadvance amount, and (b) any amounts invested in U.S. government
         securities or money market mutual funds backed by U.S. government
         securities maintained in an account with Fleet Bank, N.A. by the
         Borrower or the Parent and pledged or assigned to the Agent for the
         benefit of the Lenders by the Borrower or the Parent, as the case may
         be, as collateral security for the Obligations pursuant to
         documentation satisfactory to the Lenders."

                                        2






<PAGE>


<PAGE>


                  1.3 Section 6.9(a) of the Loan Agreement is amended by
deleting such Section in its entirety and replacing it with the following:

                  "(a) Have or maintain, with respect to the Parent on a
         consolidated basis (excluding BET Studio LLC), EBITDA on a cumulative
         basis from the first day of each fiscal year through the date set forth
         below at not less than, or, in the case of a loss, not more than, the
         respective amounts set forth below opposite each such last day of the
         fiscal quarter:


<TABLE>
<CAPTION>

         Date                                               EBITDA
         ----                                               ------
        <S>                                                 <C>
         April 30, 1998                                     ($7,000,000)
         July 31, 1998                                      ($5,000,000)
         October 31, 1998                                    $7,000,000
         January 31, 1999                                    $2,500,000
         April 30, 1999                                     ($7,000,000)"

</TABLE>


                  1.4 Section 6.9(b) of the Loan Agreement is amended by
deleting such Section in its entirety and replacing it with the following:

                  "(b) Have or maintain, with respect to the Parent on a
         consolidated basis (excluding BET Studio LLC), Tangible Net Worth as of
         the dates set forth below at not less than the respective amounts set
         forth opposite each such date:


<TABLE>
<CAPTION>

                                                           Minimum Tangible
         Date                                                  Net Worth    
         ----                                              ----------------    
         <S>                                               <C>
          April 30, 1998                                      $31,000,000
          July 31, 1998                                       $32,000,000
          October 31, 1998                                    $38,400,000
          January 31, 1999                                    $36,300,000
          April 30, 1999                                      $32,700,000"

</TABLE>



                  1.5 Section 7.1 of the Loan Agreement is amended by adding the
following clause (h) to the end of such Section:

                  "(h) Indebtedness of the Parent, the Borrower or any 
         Subsidiary to the extent permitted under Section 7.9(c) hereof."

                  1.6 Section 7.9(c) of the Loan Agreement is amended by
deleting such Section in its entirety and replacing it with the following:

                  "(c) Without duplication, Investments by (i) the Parent or
          any Subsidiary in the Borrower; (ii) by the Borrower or the Parent
          in any Subsidiary as in effect as of January 31,

                                        3






<PAGE>


<PAGE>


         1999 and set forth on Schedule 7.9; (iii) an advance or advances in the
         ordinary course of business during the period from January 31, 1999
         through and including May 31, 1999 to any Subsidiary by the Borrower
         which shall not exceed $2,300,000 in the aggregate outstanding at any
         time and (iv) an advance or advances to Balihides by the Borrower which
         shall not exceed $1,500,000 in the aggregate outstanding at any time;
         provided, that in the case of the advance or advances referred to in
         clause (iv), (A) the proceeds of such advance or advances shall be used
         by Balihides to repay the entire outstanding balance under a certain
         line of credit provided by PT Hanil Tamara Bank of Korea to Balihides,
         (B) such line of credit shall be terminated contemporaneously with such
         repayment and (C) such advance or advances shall be evidenced by a
         promissory note and such promissory note shall be pledged to the Agent
         on terms and conditions satisfactory to the Agent and there shall be no
         restrictions whatsoever on the ability of Balihides to repay such
         advance or advances;"

                  1.7 Section 7.9(d) of the Loan Agreement is amended by
deleting such Section in its entirety and replacing it with the following:

                  "(d) Investments in BET Studio LLC; provided that the amount
         of Investments pursuant to this subsection (d) shall not exceed in the
         aggregate $3,000,000 including the G- III Standby L/C (to the extent
         permitted by this Agreement), which standby letter of credit is an
         Investment expressly permitted under this Section 7.9;"

                  1.8 Section 7.13 of the Loan Agreement is amended by deleting
such Section in its entirety and replacing it with the following:

                  "SECTION 7.13 CAPITAL EXPENDITURES.

                           Make or be or become obligated to make Capital
         Expenditures for the Parent, Borrower and the Subsidiaries, in an
         amount in excess of (a) $1,300,000 in the aggregate during the period
         commencing on February 1, 1998 and ending on January 31, 1999; and (b)
         $400,000 in the aggregate during the period commencing on February 1,
         1999 and ending on the Commitment Termination Date. Capital
         Expenditures shall not include expenditures to the extent that such
         expenditures constitute a reinvestment of proceeds from any asset sale
         permitted under this Agreement."

                  1.9 The Loan Agreement, the Loan Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing, shall each be deemed to be amended hereby to the extent necessary, if
any, to give effect to the provisions of this Amendment. Except as so amended
hereby, the Loan Agreement and the Loan Documents shall remain in full force and
effect in accordance with their respective terms.

                                        4






<PAGE>


<PAGE>


         SECTION 2. REPRESENTATIONS AND WARRANTIES.

                  The Borrower hereby represents and warrants to the Agent and
the Lenders that:

                  2.1 After giving effect to the amendment of the Loan Agreement
pursuant to this Amendment: (i) each of the representations and warranties set
forth in Article 3 of the Loan Agreement is true and correct in all respects as
if made on the date hereof and (ii) there exists no Default or Event of Default
under the Loan Agreement after giving effect to this Amendment.

                  2.2 The Borrower has full corporate power and authority to
execute and deliver this Amendment and to perform the obligations on its part to
be performed thereunder and under the Loan Agreement as amended hereby.

         SECTION 3. CONDITIONS PRECEDENT TO AMENDMENTS.

                  The effectiveness of the amendments contained in Section 1 of
this Amendment, are each and all subject to the satisfaction, in form and
substance satisfactory to the Agent, of each of the following conditions
precedent:

                  3.1 The Borrower shall have duly executed and delivered this
Amendment.

                  3.2 Each of the conditions precedent set forth in Section 4.1
and Section 4.2 of the Loan Agreement shall have been satisfied or waived in
accordance with the terms of the Loan Agreement.

                  3.3 The representations and warranties set forth in Section 2
hereof shall be true, correct and complete on and as of the closing date of this
Amendment as though made on such date.

                  3.4 The Agent shall have received such approvals, opinions or
documents as any Lender through the Agent may reasonably request, the Borrower
and the Guarantors shall have taken all such other actions as any Lender through
the Agent may reasonably request, and all legal matters incident to the
foregoing shall be satisfactory to the Agent.

         SECTION 4. REFERENCE TO AND EFFECT UPON THE LOAN AGREEMENT AND
                    OTHER LOAN

                                    DOCUMENTS.

                  4.1 Except as specifically amended in Section 1 above, the
Loan Agreement and each of the other Loan Documents shall remain in full force
and effect and each is hereby ratified and confirmed.

                  4.2 The execution, delivery and effect of this Amendment shall
be limited precisely as written and shall not be deemed to (i) be a consent to
any waiver of any term or

                                        5






<PAGE>


<PAGE>


condition or to any amendment or modification of any term or condition of the
Loan Agreement or any other Loan Document, except, upon the effectiveness, if
any, of this Amendment, as specifically amended in Section 1 above, or (ii)
prejudice any right, power or remedy which the Agent or any Lender now has or
may have in the future under or in connection with the Loan Agreement or any
other Loan Document. Upon the effectiveness of this Amendment, each reference in
the Loan Agreement to "this Agreement", "hereunder", "hereof", "herein" or any
other word or words of similar import shall mean and be a reference to the Loan
Agreement as amended hereby, and each reference in any other Loan Document to
the Loan Agreement or any word or words of similar import shall mean and be a
reference to the Loan Agreement as amended hereby.

         SECTION 5. MISCELLANEOUS

         5.1 This Amendment may be executed in any number of counterparts, each
of which when so executed shall be deemed an original, but all such counterparts
shall constitute one and the same instrument.

         5.2 The Borrower shall pay on demand all reasonable fees, costs and
expenses incurred by Agent in connection with the preparation, execution and
delivery of this Amendment (including, without limitation, all reasonable
attorneys' fees).

         5.3 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF NEW YORK.

                            [SIGNATURE PAGE FOLLOWS]

                                        6






<PAGE>


<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed on the date first above written.

                                    G-III LEATHER FASHIONS, INC.

                                    By:    /s/ Wayne S. Miller  
                                       ----------------------------------
                                    Name:  Wayne S. Miller             
                                         --------------------------------
                                    Title: Chief Financial Officer        
                                          -------------------------------


                                    FLEET BANK, N.A., AS LENDER


                                    By:    /s/ Steven Navarro
                                       -----------------------------------  
                                    Name:  Steven Navarro 
                                         --------------------------------
                                    Title: Senior Vice President          
                                          -------------------------------


                                    THE CHASE MANHATTAN BANK,
                                    AS LENDER


                                    By:    /s/ Mala Popli                 
                                       ----------------------------------
                                    Name:  Mala Popli                     
                                         --------------------------------
                                    Title: Assistant Vice President       
                                          -------------------------------


                                    THE CIT GROUP/COMMERCIAL SERVICES,
                                    INC., AS LENDER



                                    By:    /s/ Kelly Colleran 
                                       ----------------------------------
                                    Name:  Kelly Colleran                 
                                         --------------------------------
                                    Title: Assistant Vice President       
                                          -------------------------------


                                    FLEET BANK, N. A., AS AGENT


                                    By:    /s/ Steven Navarro  
                                       ----------------------------------
                                    Name:  Steven Navarro                
                                         --------------------------------
                                    Title: Senior Vice President 
                                          -------------------------------



<PAGE>








<PAGE>


December 2, 1998

Mr. Aron Goldfarb
200 East 65th Street
New York, New York 10021

Dear Mr. Goldfarb:

This letter will confirm the following agreement between G-III Apparel Group,
Ltd. (the "Company") and you.

1) You will continue to be a Consultant to the Company.

2) In consideration of your consulting to the Company, you will continue to be
   paid $1,000 per month.

3) The Company shall continue to provide medical insurance to you and your wife
   Esther Goldfarb.

4) The Company shall continue to provide you with an automobile or shall
   reimburse you for the cost thereof.

5) The Company shall continue to furnish you with office space, secretarial
   support and other office services for so long as you shall desire.

6) If you shall pre-decease your wife, this agreement and all benefits hereunder
   shall terminate, provided, however, that the Company shall continue to
   provide the medical insurance referred to in Section 3 to your wife.

If the foregoing accurately sets forth our understanding, please execute both
copies of this letter and return one executed copy to the undersigned.

                                           Very truly yours,

                                           G-III Apparel Group, Ltd.

                                           By:  /s/ Wayne S. Miller 
                                                -------------------------
                                                Chief Financial Officer

Accepted and Agreed to:

/s/ Aron Goldfarb 



<PAGE>










<PAGE>

                                   EXHIBIT 21

                           SUBSIDIARIES OF THE COMPANY

                            (as of January 31, 1999)


G-III Leather Fashions, Inc. a New York corporation

Siena Leather, Ltd., a New York corporation

Global International Trading Company, a Korean corporation

G-III Hong Kong Ltd., a Hong Kong corporation

Wee Beez International Trading Co., a Hong Kong corporation

Indawa Holding Corp., a Delaware corporation

P.T. Balihides, an Indonesian corporation

Global Apparel Sourcing, Ltd., a Delaware corporation

G-III Retail Outlets, Inc., a Delaware corporation

G-III Apparel Manufacturing, Inc., a Tennessee corporation

BET Design Studio, LLC (50.1%), a Delaware limited liability company



<PAGE>









<PAGE>


                                                                      Exhibit 23

              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We have issued our report dated April 13, 1999, accompanying the consolidated
financial statements included in the Annual Report of G-III Apparel Group,
Ltd. on Form 10-K for the year ended January 31, 1999. We hereby consent to
the incorporation by reference of said report in the Registration Statement of
G-III Apparel Group, Ltd. on Form S-8 (Registration Nos. 33-45460; 33-45461;
33-81066; 333-51765) and to the use of our name as it appears under the caption
"Experts."

GRANT THORNTON LLP


New York, New York
April 13, 1999




<PAGE>






<TABLE> <S> <C>

<ARTICLE>                            5
<MULTIPLIER>                         1,000
       
<S>                                                  <C>
<FISCAL-YEAR-END>                                    JAN-31-1999
<PERIOD-START>                                       FEB-01-1998
<PERIOD-END>                                         JAN-31-1999
<PERIOD-TYPE>                                             12-MOS
<CASH>                                                     7,241
<SECURITIES>                                                   0
<RECEIVABLES>                                             12,280
<ALLOWANCES>                                              (1,667)
<INVENTORY>                                               16,355
<CURRENT-ASSETS>                                          35,911
<PP&E>                                                    12,929
<DEPRECIATION>                                            (9,152)
<TOTAL-ASSETS>                                            44,870
<CURRENT-LIABILITIES>                                      8,674
<BONDS>                                                        0
<COMMON>                                                      67
<PREFERRED-MANDATORY>                                          0
<PREFERRED>                                                    0
<OTHER-SE>                                                35,508
<TOTAL-LIABILITY-AND-EQUITY>                              44,870
<SALES>                                                  121,644
<TOTAL-REVENUES>                                         121,644
<CGS>                                                     95,393
<TOTAL-COSTS>                                             95,393
<OTHER-EXPENSES>                                               0
<LOSS-PROVISION>                                               0
<INTEREST-EXPENSE>                                         2,115
<INCOME-PRETAX>                                           (3,099)
<INCOME-TAX>                                                (541)
<INCOME-CONTINUING>                                       (1,180)
<DISCONTINUED>                                                 0
<EXTRAORDINARY>                                                0
<CHANGES>                                                      0
<NET-INCOME>                                              (1,180)
<EPS-PRIMARY>                                              (0.18)
<EPS-DILUTED>                                              (0.18)
        



<PAGE>






<TABLE> <S> <C>

<ARTICLE>                           5
<RESTATED>
<MULTIPLIER>                        1,000
       
<S>                                                  <C>
<FISCAL-YEAR-END>                                    JAN-31-1998
<PERIOD-START>                                       FEB-01-1997
<PERIOD-END>                                         JAN-31-1998
<PERIOD-TYPE>                                             12-MOS
<CASH>                                                     5,842
<SECURITIES>                                                   0
<RECEIVABLES>                                             12,664
<ALLOWANCES>                                              (1,247)
<INVENTORY>                                               20,232
<CURRENT-ASSETS>                                          39,249
<PP&E>                                                    11,495
<DEPRECIATION>                                            (8,064)
<TOTAL-ASSETS>                                            46,746
<CURRENT-LIABILITIES>                                      9,953
<BONDS>                                                        0
<COMMON>                                                      65
<PREFERRED-MANDATORY>                                          0
<PREFERRED>                                                    0
<OTHER-SE>                                                35,621
<TOTAL-LIABILITY-AND-EQUITY>                              46,746
<SALES>                                                  120,136
<TOTAL-REVENUES>                                         120,136
<CGS>                                                     91,559
<TOTAL-COSTS>                                             91,559
<OTHER-EXPENSES>                                               0
<LOSS-PROVISION>                                               0
<INTEREST-EXPENSE>                                         1,534
<INCOME-PRETAX>                                            3,256
<INCOME-TAX>                                                 906
<INCOME-CONTINUING>                                        2,799
<DISCONTINUED>                                                 0
<EXTRAORDINARY>                                                0
<CHANGES>                                                      0
<NET-INCOME>                                               2,799
<EPS-PRIMARY>                                               0.43
<EPS-DILUTED>                                               0.40
        



<PAGE>






<TABLE> <S> <C>

<ARTICLE>                           5
<RESTATED>
<MULTIPLIER>                        1,000
       
<S>                                                 <C> 
<FISCAL-YEAR-END>                                    JAN-31-1997
<PERIOD-START>                                       FEB-01-1996
<PERIOD-END>                                         JAN-31-1997
<PERIOD-TYPE>                                             12-MOS
<CASH>                                                    13,067
<SECURITIES>                                                   0
<RECEIVABLES>                                              9,870
<ALLOWANCES>                                              (2,694)
<INVENTORY>                                               13,986
<CURRENT-ASSETS>                                          35,198
<PP&E>                                                    12,641
<DEPRECIATION>                                            (7,611)
<TOTAL-ASSETS>                                            44,555
<CURRENT-LIABILITIES>                                     10,701
<BONDS>                                                        0
<COMMON>                                                      65
<PREFERRED-MANDATORY>                                          0
<PREFERRED>                                                    0
<OTHER-SE>                                                32,760
<TOTAL-LIABILITY-AND-EQUITY>                              44,555
<SALES>                                                  117,645
<TOTAL-REVENUES>                                         117,645
<CGS>                                                     88,057
<TOTAL-COSTS>                                             88,057
<OTHER-EXPENSES>                                               0
<LOSS-PROVISION>                                               0
<INTEREST-EXPENSE>                                         2,075
<INCOME-PRETAX>                                            3,971
<INCOME-TAX>                                                 885
<INCOME-CONTINUING>                                        3,086
<DISCONTINUED>                                                 0
<EXTRAORDINARY>                                                0
<CHANGES>                                                      0
<NET-INCOME>                                               3,086
<EPS-PRIMARY>                                               0.48
<EPS-DILUTED>                                               0.46
        



</TABLE>