facility costs ($520,000), and advertising and promotion ($445,000). Selling general and administrative expenses increased primarily as a result of the business we acquired in late May 2007. Personnel costs also increased due to increased staffing of our Calvin Klein women’s suits and dress divisions and our new Sean John sportswear division. Facility costs increased primarily as a result of rent and utility costs associated with our new warehouse. Advertising and promotion increased primarily due to sales of Calvin Klein suits and dresses as the amount of spending on advertising that is required under our license agreements is generally based on a percentage of net sales of the licensed product. We expect that our selling, general and administrative expenses will continue to increase during the remainder of the fiscal year as a result of our recent acquisition, as well as the continued expansion of our business.

Interest and finance charges, net for the three-month period ended July 31, 2007 were $147,000 compared to $1.3 million for the comparable period last year. Interest expense decreased due to interest income earned on higher average cash balances resulting from our sales of common stock in July 2006 and March 2007.

Income tax benefit for the three months ended July 31, 2007 was $626,000 compared to $1.3 million in the comparable period last year. The effective rate for the current period was 41.5% compared to 42.5% for the comparable prior period. The effective rate is lower in the current period due to a change enacted by New York State with respect to the manner in which our income is allocated to the state for tax purposes.

Six months ended July 31, 2007 compared to six months ended July 31, 2006

Net sales for the six months ended July 31, 2007 increased to $119.0 million from $83.5 million in the same period last year. Net sales of licensed apparel increased to $81.9 million from $54.2 million, primarily as a result of an increase of $20.8 million in net sales of Calvin Klein licensed product. This increase was primarily due to sales of dresses, which did not ship in the comparable period last year, and expanded distribution of women’s suits, which began shipping in January 2006. Net sales of non-licensed apparel in the six months increased to $37.1 million from $29.3 million due to net sales of $9.9 million from the Jessica Howard/Industrial Cotton business we acquired in late May 2007.

Gross profit increased to $29.3 million, or 24.6% of net sales, for the six month period ended July 31, 2007, from $17.5 million, or 21.0% of net sales, in the same period last year. The gross profit percentage in our licensed apparel segment was 25.6% in the six month period ended July 31, 2007 compared to 24.1% in the same period last year. Sales of Calvin Klein dresses, which did not ship in the prior comparable period, was the primary reason for the increase in gross profit as a percentage of sales in our licensed apparel segment. The gross profit percentage in our non-licensed segment was 22.4% in the six month period ended July 31, 2007 compared to 15.2% in the same period last year. This percentage was favorably impacted by the reversal of accrued returns in the current year as a result of better sell through at the retail level, gross margin attributable to sales from the Jessica Howard/Industrial Cotton division and improved gross margins on sales of Exsto product as a result of executing our production earlier and reducing our freight costs to import this product.

Selling, general and administrative expenses increased $7.4 million to $41.4 million in the six month period ended July 31, 2007 from $34.0 million in the same period last year. Selling, general and administrative expenses increased primarily as a result of increases in personnel costs ($4.5 million), facility costs ($1.2 million), and advertising and promotion ($800,000). Personnel costs increased primarily due to the additional staff resulting from the business we acquired in late May 2007 and increased staffing of our Calvin Klein women’s suits and dress divisions and our new Sean John sportswear division. Facility costs increased primarily as a result of rent and utility costs associated with our new warehouse and the use of third party warehouses to accommodate the increased storage and shipping volume. Advertising and promotion increased primarily due to sales of Calvin Klein suits and dresses as the amount of spending on advertising that is required under our license agreements is generally based on a percentage of net sales of the licensed product. We expect that our selling, general and administrative expenses will continue to increase during the remainder of the fiscal year as a result of our recent acquisition, as well as the continued expansion of our business.

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Interest and finance charges, net for the six-month period ended July 31, 2007 were $412,000 compared to $1.9 million for the comparable period last year. Interest expense decreased due to interest income earned on higher average cash balances resulting from our sales of common stock in July 2006 and March 2007.

Income tax benefit for the six months ended July 31, 2007 was $5.2 million compared to $7.8 million in the comparable period last year. The effective rate for the current period was 41.5% compared to 42.5% for the comparable prior period. The effective rate is lower in the current period due to a change enacted by New York State with respect to the manner in which our income is allocated to the state for tax purposes.

Liquidity and Capital Resources

Our primary cash requirements are to fund our seasonal build up in inventories and accounts receivable, primarily during our second and third fiscal quarters each year. Due to the seasonality of our business, we generally reach our maximum borrowing under our asset-based credit facility during our third fiscal quarter. Historically, the primary sources to meet our cash requirements during the course of a year are short-term borrowings under this credit facility and cash generated from operations. We also raised cash from a public offering of our common stock in March 2007 and a private placement of our common stock and warrants to purchase common stock in July 2006. At July 31, 2007, we had cash and cash equivalents of $2.7 million and short-term outstanding borrowings of $15.2 million compared to cash and cash equivalents of $728,000 and short-term outstanding borrowings of $48.6 million at July 31, 2006.

Public Offering

On March 9, 2007, we completed a public offering of 4,500,000 shares of common stock, of which 1,621,000 shares were sold by us, and 2,879,000 shares were sold by certain selling stockholders at a public offering price of $20.00 per share. We received net proceeds of $30.5 million from this offering after payment of the underwriting discount and expenses of the offering. On April 12, 2007, we received additional net proceeds of $6.0 million in connection with the sale of 313,334 shares of common stock pursuant to the exercise of the underwriters’ overallotment option. A portion of the proceeds was used to fund the acquisition of the Jessica Howard/Industrial Cotton business.

Financing Agreement

We have a financing agreement with The CIT Group/Commercial Services, Inc., as Agent, for a consortium of banks. The financing agreement, which expires on July 11, 2008, is a senior secured credit facility that provided for borrowings in the aggregate principal amount of up to $195.0 million. As a result of required principal payments under the term loan portion of this facility, the maximum aggregate principal amount of borrowings was $181.4 million as of July 31, 2007. The facility consists of a revolving line of credit and a term loan.

The revolving line of credit provides for a maximum line ranging from $45 million to $165 million at specific times during the year, provided that there are no borrowings outstanding for at least 45 days during the period from December 1 through July 31 each year. We satisfied this requirement for the most recent period. Amounts available under the line are subject to borrowing base formulas and over advances as specified in the financing agreement. Borrowings under the line of credit bear interest at our option at the prime rate less 0.25% or LIBOR plus 2.0%.

The amount borrowed under the line of credit varies based on our seasonal requirements. As of July 31, 2007, there were $7.9 of short-term outstanding borrowings compared to $41.2 million outstanding as of July 31, 2006. Our contingent liability under open letters of credit was approximately $20.1million as of July 31, 2007 compared to $20.8 million as of July 31, 2006.

The term loan in the original principal amount of $30 million is payable over three years with eleven quarterly installments of principal in the amount of $1,650,000. Payment of quarterly installments began on December 31, 2005, with the remaining balance due on maturity of the loan.

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Mandatory prepayments are required under the term loan commencing with the fiscal year that ended January 31, 2007 to the extent of 50% of excess cash flow, as defined. In the quarter ended April 30, 2007, a mandatory prepayment with respect to the fiscal year ended January 31, 2007 was made in the amount of $2.0 million. The term loan bears interest, at our option, at prime plus 0.75% (9.0% at August 1, 2007) or LIBOR plus 3.0% (8.4% at August 1, 2007). The balance due on the term loan at July 31, 2007 was $16.4 million.

The financing agreement requires us, among other things, to maintain tangible net worth at specified levels, achieve specified earnings before interest, taxes, depreciation and amortization and maintain minimum fixed charge coverage ratios as defined. It also limits capital expenditures and payments for cash dividends and stock redemption to $1.5 million plus an additional amount based on the proceeds of sales of equity securities. As of July 31, 2007, we were in compliance with these covenants. The financing agreement is collateralized by all of our assets.

Subsidiary Loan

PT Balihides, our inactive Indonesian subsidiary, had a separate credit facility with an Indonesian bank. In December 2002, we closed the manufacturing facility operated by this subsidiary. The notes payable under this facility represent borrowings as of July 31, 2007 of approximately $770,000. The loan is collateralized by the property, plant, and equipment of this subsidiary. No other G-III entity has guaranteed this loan. We continue to be in discussions with the bank regarding settlement of this debt.

Cash from Operating Activities

We used $36.3 million of cash in operating activities during the six months ended July 31, 2007, primarily as a result of our net loss of $7.3 million and increases of $56.4 million in inventory and $10.3 million in prepaid taxes, offset, in part, by an increase in accounts payable and accrued expenses of $40.5 million. The increases in these operating cash flow items are consistent with our seasonal pattern. We typically have a net loss through our first two fiscal quarters. During the second quarter, we build inventory for the fall shipping season accounting for the increase in inventory and accounts payable. The fall shipping season begins in the latter part of our second quarter. The decrease in income taxes payable is attributable to income taxes paid subsequent to year end as a result of our fiscal 2007 income and the increase in prepaid taxes is a result of the tax benefit recorded for our loss through the six months ended July 31, 2008. The increase in accounts payable and accrued expenses is attributable to our purchasing activity for the fall season.

Cash from Investing Activities

We used $13.1 million of cash in investing activities in the six months ended July 31, 2007. We used $8.3 million in connection with the acquisition of the Jessica Howard/Indutrial Cotton business. We paid $3.7 million during the quarter in connection with contingent payments earned as a result of the operating results of the two businesses we acquired in 2005. All contingent earnouts with respect to fiscal 2007 were paid in the first quarter and there will be no further payments during the remainder of fiscal 2008. The sellers are entitled to earn-out payments through the fiscal year ending January 31, 2009. We also used cash for capital expenditures of $1.1 million in the six months ended July 31, 2007, primarily for renovation of our back office space which was relocated as a result of a lease termination and the completion of our renovation of our new warehouse facility in South Brunswick, NJ.

Cash from Financing Activities

Cash from financing activities provided $40.0 million in the six months ended July 31, 2007 primarily from net proceeds of $36.5 million from our public offering in March 2007 and an increase in net amounts borrowed from our credit facility of $6.3 million offset in part by repayments of $5.4 million under our term loan. During the six months ended July 31, 2007, we paid two installment payments of $1.65 million and were also required to make a prepayment of $2.0 million based on excess cash flow as defined in the loan agreement.

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Critical Accounting Policies

Our discussion of results of operations and financial condition relies on our consolidated financial statements that are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. We believe that investors need to be aware of these policies and how they impact our financial statements as a whole, as well as our related discussion and analysis presented herein. While we believe that these accounting policies are based on sound measurement criteria, actual future events can and often do result in outcomes that can be materially different from these estimates or forecasts. The accounting policies and related estimates described in our Annual Report on Form 10-K for the year ended January 31, 2007 are those that depend most heavily on these judgments and estimates. As of July 31, 2007, there have been no material changes to our critical accounting policies.

Effects of Recently Issued Accounting Pronouncements

On February 1, 2007, we adopted FASB Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes’’ (‘‘FIN 48’’).  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in our financial statements in accordance with FASB Statement No. 109 ‘‘Accounting for Income Taxes.’’  FIN 48 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a return, as well as guidance on derecognition, classification, interest and penalties and financial statement reporting disclosures.  The implementation of FIN 48 did not have a material effect on our results of operations or our financial position.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

There are no material changes to the disclosure made with respect to these matters in our Annual Report on Form 10-K for the year ended January 31, 2007.

Item 4.    Controls and Procedures.

As of the end of the period covered by this report, our management, including the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. During our last fiscal quarter, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1A.    Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in ‘‘Item 1A. Risk Factors’’ in our Annual Report on Form 10-K for the year ended January 31, 2007, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 4.    Submission of Matters to a Vote of Stockholders

	(a)	Our Annual Meeting of Stockholders was held on June 7, 2007.

	(b)	The following matters were voted on and approved by our stockholders at the Annual Meeting:

	(i)	The election of nine directors to serve for the ensuing year. There were no broker non-votes relating to this matter. The following nominees were elected as directors (with our stockholders having voted as set forth below):

Nominee			Votes For						Withheld Authority to Vote
Morris Goldfarb					15,814,517						291,497
Sammy Aaron					15,816,310						289,704
Thomas J. Brosig					15,819,750						286,264
Pieter Deiters					15,828,838						277,176
Alan Feller					15,831,708						274,306
Carl Katz					15,822,460						283,554
Laura H. Pomerantz					15,733,135						372,879
Willem van Bokhorst					15,691,067						414,947
Richard White					13,680,257						2,425,757

	(ii)	The approval of an amendment to our 2005 Stock Incentive Plan primarily to increase the number of shares available for issuance under the plan. Our stockholders voted as follows:

FOR:					8,069,766
AGAINST:					6,387,189
ABSTENTIONS:					42,354
BROKER NON-VOTES:					1,606,705

	(iii)	The ratification of the appointment of Ernst & Young LLP as our independent certified public accountants for the fiscal year ending January 31, 2008. Our stockholders voted as follows:

FOR:					15,966,528
AGAINST:					131,223
ABSTENTIONS:					8,263
BROKER NON-VOTES:					0

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Item 5.    Other Information.

On September 11, 2007, the Compensation Committee and Board of Directors of the Company approved amendments to the Company’s 2005 Stock Incentive Plan that (i) gave the Compensation Committee sole responsibility for matters relating to awards to non-employee directors, (ii) limited the ability to accelerate vesting other than in connection with a change in control or death, disability or retirement, and (iii) added minimum vesting and performance periods applicable to restricted stock and deferred stock awards. A copy of the Plan, as amended in June 2007 and September 2007, is filed as Exhibit 10.2 to this Form 10-Q.

Item 6.    Exhibits.

	10	.1				Asset Purchase Agreement dated May 24, 2007, by and among the Company, Starlo Fashions, Inc., Jessica Howard, Ltd., Industrial Cotton, Inc., Robert Glick and Mary Williams.1
	10	.2				G-III Apparel Group, Ltd. 2005 Stock Incentive Plan, as amended.
	31	.1				Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	31	.2				Certification by Neal S. Nackman, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	32	.1				Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	32	.2				Certification by Neal S. Nackman, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.

(1)	Previously filed as an exhibit to the Company’s Report on Form 8-K filed on May 31, 2007, which exhibit is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements 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.
			(Registrant)
Date:    September 13, 2007			By:			/s/ Morris Goldfarb
						Morris Goldfarb Chief Executive Officer
Date:    September 13, 2007			By:			/s/ Neal S. Nackman
						Neal S. Nackman Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.						Description
	10	.2				G-III Apparel Group, Ltd. 2005 Stock Incentive Plan, as amended.
	31	.1				Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	31	.2				Certification by Neal S. Nackman, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	32	.1				Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.
	32	.2				Certification by Neal S. Nackman, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2007.

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