
<PAGE>
    As filed with the Securities and Exchange Commission on October 3, 1997
 
                                                      Registration No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                             ---------------------
 
                          I.C. ISAACS & COMPANY, INC.
 
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                   <C>                                   <C>
              DELAWARE                                2253                               52-1377061
      (State of Incorporation)            (Primary Standard Industrial                (I.R.S. Employer
                                          Classification Code Number)               Identification No.)
                                                3840 BANK STREET
                                         BALTIMORE, MARYLAND 21224-2522
                                                 (410) 342-8200
</TABLE>
 
              (Address, including zip code, and telephone number,
       including area code, of registrant's principal executive offices)
 
<TABLE>
<S>                                                      <C>
                    ROBERT J. ARNOT                                          GERALD W. LEAR
 CHAIRMAN OF THE BOARD AND CO-CHIEF EXECUTIVE OFFICER           PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER
              I.C. ISAACS & COMPANY, INC.                              I.C. ISAACS & COMPANY, INC.
             350 FIFTH AVENUE, SUITE 1029                                   3840 BANK STREET
               NEW YORK, NEW YORK 10118                              BALTIMORE, MARYLAND 21224-2522
                    (212) 563-2720                                           (410) 342-8200
</TABLE>
 
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                         ------------------------------
 
                         Copies of all communications,
 including all communications sent to the agent for service, should be sent to:
 
<TABLE>
<S>                                         <C>
      EARL S. WELLSCHLAGER, ESQUIRE                  JOEL J. HUGHEY, ESQUIRE
          PIPER & MARBURY L.L.P.                        ALSTON & BIRD LLP
         36 SOUTH CHARLES STREET                     1201 W. PEACHTREE STREET
        BALTIMORE, MARYLAND 21201                     ATLANTA, GEORGIA 30309
              (410) 539-2530                              (404) 881-7000
</TABLE>
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
 
    IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, CHECK THE FOLLOWING BOX:  / /
 
    IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING:  / /
------------------------
 
    IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING:  / /
 
    IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX:  / /
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                     PROPOSED         PROPOSED MAXIMUM
         TITLE OF EACH CLASS OF               AMOUNT TO BE       MAXIMUM OFFERING    AGGREGATE OFFERING        AMOUNT OF
       SECURITIES TO BE REGISTERED            REGISTERED(1)      PRICE PER UNIT(2)          PRICE          REGISTRATION FEE
<S>                                        <C>                  <C>                  <C>                  <C>
COMMON STOCK, $.0001 PAR VALUE...........       4,370,000             $14.00           $61,180,000.00         $18,540.00
</TABLE>
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
(1) INCLUDES 570,000 SHARES OF COMMON STOCK SUBJECT TO AN OPTION GRANTED TO THE
    UNDERWRITERS BY THE COMPANY (AS HEREINAFTER DEFINED) TO COVER
    OVER-ALLOTMENTS, IF ANY. SEE "UNDERWRITING."
 
(2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE IN
    ACCORDANCE WITH RULE 457 UNDER THE SECURITIES ACT.
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
                  SUBJECT TO COMPLETION, DATED OCTOBER 3, 1997
 
PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
                                3,800,000 SHARES
 
[LOGO]                I.C. ISAACS & COMPANY, INC.
 
                                  COMMON STOCK
 
    All of the 3,800,000 shares of Common Stock offered hereby are being sold by
I.C. Isaacs & Company, Inc. (the "Company"). Prior to the Offering, there has
been no public market for the Common Stock of the Company. It is currently
anticipated that the initial public offering price will be between $12.00 and
$14.00 per share. See "Underwriting" for information relating to the
determination of the initial public offering price. Application has been made to
list the Common Stock on the Nasdaq National Market under the symbol "ISAC."
 
    SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON
STOCK OFFERED HEREBY.
 
                             ---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
     EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
        SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
             COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
                THIS PROSPECTUS. ANY REPRESENTATION TO THE
                      CONTRARY IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                                                            UNDERWRITING
                                                          PRICE TO         DISCOUNTS AND        PROCEEDS TO
                                                           PUBLIC          COMMISSIONS(1)        COMPANY(2)
<S>                                                  <C>                 <C>                 <C>
Per Share..........................................          $                   $                   $
Total(3)...........................................          $                   $                   $
</TABLE>
 
(1) See "Underwriting" for a description of the indemnification arrangements
    with the Underwriters and other matters.
 
(2) Before deducting offering expenses payable by the Company estimated to be
    $      .
 
(3) The Company has granted the Underwriters a 30-day option to purchase up to
    570,000 additional shares of Common Stock solely to cover over-allotments,
    if any. If such option is exercised in full, the total Price to Public,
    Underwriting Discounts and Commissions and Proceeds to Company will total
    $      , $      and $      , respectively. See "Underwriting."
 
    The shares of Common Stock are offered severally by the Underwriters named
herein, subject to prior sale, when, as and if received and accepted by them,
subject to their right to reject orders, in whole or in part, and to certain
other conditions. It is expected that delivery of the certificates representing
such shares will be made against payment therefor in immediately available funds
at the office of The Robinson-Humphrey Company, LLC on or about         , 1997.
 
                            ------------------------
The Robinson-Humphrey Company                             Legg Mason Wood Walker
                                                     Incorporated
 
                The date of this Prospectus is           , 1997
 
                                       4
<PAGE>
                        [PHOTOS OF PRODUCTS AND MODELS]
 
    NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY
TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER
OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
 
                            ------------------------
 
    "Lord Isaacs-Registered Trademark-," "I. C. Isaacs-Registered Trademark-,"
"Pizzazz-Registered Trademark-" and "I.G. Design-Registered Trademark-" are
trademarks of the Company. In addition, subject to the closing of the Settlement
(as described herein), "Boss-Registered Trademark-" will also be a trademark of
the Company. All other trademarks or service marks, including Beverly Hills Polo
Club-Registered Trademark-, appearing in this Prospectus are the property of
their respective owners and are not the property of the Company.
 
                            ------------------------
 
    CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
 
                                       2
<PAGE>
                               PROSPECTUS SUMMARY
 
    THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING
ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE NOTED, THE "COMPANY" REFERS TO
I.C. ISAACS & COMPANY, INC. (FORMERLY I.G. DESIGN, INC.) AND ITS PREDECESSORS,
SUBSIDIARIES AND AFFILIATED COMPANIES, INCLUDING I.C. ISAACS & COMPANY L.P. (SEE
"COMPANY ORGANIZATION"). UNLESS OTHERWISE NOTED, ALL COMMON STOCK SHARE AMOUNTS,
PER SHARE DATA AND OTHER INFORMATION SET FORTH IN THIS PROSPECTUS (I) HAVE BEEN
ADJUSTED TO REFLECT A 370.4847-FOR-1 STOCK SPLIT, WHICH WILL BE EFFECTED PRIOR
TO CONSUMMATION OF THE OFFERING, (II) GIVE EFFECT TO THE REORGANIZATION (AS
DEFINED IN "COMPANY ORGANIZATION") AND (III) ASSUME THAT THE UNDERWRITERS'
OVER-ALLOTMENT OPTION HAS NOT BEEN EXERCISED.
 
THE COMPANY
 
    I.C. Isaacs & Company, Inc. is a rapidly growing designer, manufacturer and
marketer of branded sportswear. Founded in 1913, the Company offers full lines
of sportswear for young men, women and boys under the BOSS brand in the United
States and Puerto Rico and sportswear for men and women under the Beverly Hills
Polo Club brand in the United States, Puerto Rico and Europe. Through a focused
strategy of providing fashionable, branded merchandise at value prices, the
Company has emerged as a significant fashion source for youthful consumers who
purchase sportswear and outerwear through specialty and department stores. The
Company also offers women's sportswear under various other Company-owned brand
names as well as under third-party private labels. In the first six months of
1997, net sales and operating income totaled $77.7 million and $8.8 million,
respectively, as compared to $51.9 million and $3.7 million in the first six
months of 1996.
 
    The Company manufactures and markets sportswear under the BOSS brand for
sale at specified price points in the United States and Puerto Rico and has
positioned the BOSS line to appeal to consumers who desire a fresh, urban,
fashion-forward look. Through creative and innovative marketing, the Company has
created powerful brand appeal for the BOSS line and has become an active
influence in young men's fashion. The BOSS collection has been expanded from an
initial line of denim products into a full array of sportswear consisting of
jeans, tee shirts, sweatshirts, shorts, knit and woven shirts and outerwear, all
of which are characterized by innovative design, creative graphics and bold uses
of color. The Company also markets a juniors' sportswear line under the BOSS
brand for young women, which includes a full selection of denim products and
active sportswear. Over the past three years, the Company's net sales of BOSS
sportswear increased at a compounded annual growth rate of 24.7%. In 1996, net
sales of BOSS sportswear accounted for 72.6% of the Company's net sales.
 
    As exclusive licensee for Beverly Hills Polo Club sportswear in the United
States, Puerto Rico and Europe, the Company targets men and women who desire
updated traditional sportswear at competitive prices. To reach a broader
demographic customer base, the Beverly Hills Polo Club collection combines
contemporary design details and innovative fabrics with classic American
sportswear styling. The Beverly Hills Polo Club collection consists primarily of
cotton clothing, including jeans, pants, shorts, knit and woven shirts and
outerwear targeting the active, image-conscious consumer. Since the line's
introduction in the spring of 1994, the Company's net sales of Beverly Hills
Polo Club sportswear increased at a compounded annual growth rate of 92.7%. In
1996, net sales of Beverly Hills Polo Club sportswear accounted for 12.0% of the
Company's net sales.
 
    In the late 1980's, management made a decision to change the Company's
marketing focus from a manufacturing-driven to a brand-driven strategy. As a
result, the Company believes it has developed distinct competitive strengths
that position it for continued success. The Company's key competitive strengths
include:
 
    - EMPHASIS ON BRAND IDENTITY. The Company believes that brand identity, as
      well as the image and lifestyle that a brand conveys, are important
      factors that influence retail purchasing decisions. Both the BOSS and
      Beverly Hills Polo Club lines have strong brand identities and enable the
      Company
 
                                       3
<PAGE>
      to offer a broad continuum of designs and products well recognized by
      fashion-conscious consumers.
 
    - COMBINATION OF FASHION AND VALUE. Through its manufacturing, sourcing and
      merchandising expertise, the Company achieves a distinct combination of
      fashion and value. The Company provides its customers with fashionable,
      brand name sportswear which typically sells at retail prices below those
      of many well known designer brands.
 
    - CREATIVE AND INNOVATIVE MARKETING. Through a coordinated merchandising,
      advertising and marketing strategy, the Company has built strong name
      recognition and brand image for its products. The Company targets youthful
      consumers who are influenced by fashion, music and sports by utilizing a
      variety of advertising media, including television, print, outdoor signage
      and professional sports sponsorships.
 
    - FLEXIBLE MANUFACTURING AND SOURCING. The Company believes that its ability
      to source products from its United States facilities and third party
      foreign and domestic manufacturers enhances the Company's production
      flexibility and capacity while enabling it to control more efficiently the
      delivery, quality and pricing of its products.
 
    The Company's growth strategy includes continued capitalization on its
competitive strengths and the implementation of specific strategies for
continued expansion. The Company's principal growth strategies are as follows:
 
    - BROADEN PRODUCT OFFERINGS. The Company believes that significant
      additional expansion opportunities exist in certain product categories
      under both the BOSS and Beverly Hills Polo Club brands. Expansion within
      the BOSS product line is expected to be driven by tops and outerwear as
      well as the development of the boys', youth and juniors' lines. In
      addition, the Company recently added two new product categories under the
      BOSS brand, polo shirts and swimwear, which are in the early stages of
      development. Similarly, the Beverly Hills Polo Club brand includes a
      number of product lines that are in the early stages of market
      penetration, such as outerwear, and a number of potential product line
      expansions, such as men's dress shirts. To further develop the Beverly
      Hills Polo Club brand, product offerings within the women's line are being
      expanded, and the Company is reorganizing and increasing its women's sales
      force.
 
    - ENHANCE MARKETING PROGRAMS. While the Company believes that its current
      marketing strategy is one of its primary competitive strengths, the
      Company intends to continue its efforts to increase sales by enhancing
      consumer recognition of its brand names and images through expanded
      marketing efforts. These efforts will include increased television, print,
      outdoor and point-of-sale advertising, as well as an expanded
      "Shop-in-Shop" program at the retail level.
 
    - EXPAND CHANNELS OF DISTRIBUTION. As demand for its sportswear increases,
      the Company believes that it can continue to expand and penetrate various
      channels of distribution. In recent years, the Company has expanded its
      distribution channels beyond specialty stores and specialty store chains
      with its BOSS label to begin significant distribution to department store
      customers. The Beverly Hills Polo Club brand has not penetrated the
      department store channel to the same extent as the BOSS brand, and the
      expanded distribution of Beverly Hills Polo Club products is a primary
      growth focus of the Company.
 
    - INCREASE EUROPEAN PRESENCE. The Company believes that it is well
      positioned to capitalize on the acceptance of the Beverly Hills Polo Club
      brand name by continuing to expand its European sportswear distribution.
      The classic American sportswear look conveyed by the Beverly Hills Polo
      Club line is popular with European youth, and the Company is expanding its
      wholesale and retail channels of distribution in Europe to meet this
      increasing demand. The Company currently has distributors in eight
      countries in Europe and has three franchise stores in Spain.
 
                                       4
<PAGE>
    The Company's principal executive offices are located at 3840 Bank Street,
Baltimore, Maryland 21224-2522 (telephone number (410) 342-8200) and 350 Fifth
Avenue, Suite 1029, New York, New York 10118 (telephone number (212) 563-2720).
 
                                  THE OFFERING
 
<TABLE>
<S>                                                  <C>
Common Stock offered by the Company hereby.........  3,800,000 shares
 
Common Stock to be outstanding after the Offering    9,800,000 shares
  (1)..............................................
 
Use of Proceeds....................................  The estimated net proceeds of the
                                                     Offering of approximately $45.4 million
                                                     will be used (i) to repay approximately
                                                     $20.0 million of the Company's
                                                     outstanding debt under the Company's
                                                     credit facilities, (ii) to pay the
                                                     Initial S Corporation Distribution (as
                                                     hereinafter defined) of approximately
                                                     $15.4 million and the Subsequent S
                                                     Corporation Distribution (as
                                                     hereinafter defined) estimated to be
                                                     between $4.0 million and $5.0 million
                                                     and (iii) for general corporate and
                                                     working capital purposes. See "Use of
                                                     Proceeds."
 
Nasdaq National Market Symbol......................  Application has been made for quotation
                                                     of the Common Stock on the Nasdaq
                                                     National Market under the symbol
                                                     "ISAC."
</TABLE>
 
------------------------
 
(1) Excludes 500,000 shares of Common Stock reserved for issuance under the
    Company's 1997 Omnibus Stock Plan. See "Management--1997 Omnibus Stock
    Plan."
 
                                  RISK FACTORS
 
    See "Risk Factors" beginning on page 7 for a discussion of certain
information that should be considered by prospective purchasers of the Common
Stock offered hereby.
 
                                       5
<PAGE>
          SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
 
    The summary historical and pro forma consolidated financial data set forth
below should be read in conjunction with the more detailed consolidated
financial statements, including the notes thereto, and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein.
<TABLE>
<CAPTION>
                                                                                                           SIX MONTHS ENDED
                                                                YEAR ENDED DECEMBER 31,                        JUNE 30,
                                                 ------------------------------------------------------  --------------------
<S>                                              <C>        <C>        <C>        <C>        <C>         <C>        <C>
                                                   1992       1993       1994       1995        1996       1996       1997
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
 
<CAPTION>
                                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                              <C>        <C>        <C>        <C>        <C>         <C>        <C>
STATEMENT OF INCOME DATA:
Net sales......................................  $  62,232  $  72,414  $  85,298  $  93,271  $  118,655  $  51,899  $  77,710
Cost of sales..................................     48,051     54,880     62,216     68,530      84,421     36,224     52,021
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
Gross profit...................................     14,181     17,534     23,082     24,741      34,234     15,675     25,689
Selling, distribution, general and
  administrative expenses......................     12,282     15,214     18,333     20,267      25,627     12,018     16,984
Recovery of legal fees.........................     --         --         --         --            (718)    --           (117)
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
Operating income...............................      1,899      2,320      4,749      4,474       9,325      3,657      8,822
Interest expense...............................        997      1,260      1,191      1,247       1,365        660        922
Other income (expense) (1).....................         55      1,215      1,235         (3)         85         82         22
Minority interest..............................     --         --            (53)       (33)        (82)       (31)       (79)
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
Income before extraordinary items (1)(2).......        957      2,275      4,740      3,191       7,963      3,048      7,843
PRO FORMA STATEMENT OF INCOME DATA:
Income before income taxes.....................      3,184      2,275      5,129      3,191       7,963      3,048      7,843
Income tax provision (3).......................      1,236        933      2,103      1,308       3,265      1,250      3,216
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
Net income.....................................  $   1,948  $   1,342  $   3,026  $   1,883  $    4,698  $   1,798  $   4,627
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
                                                 ---------  ---------  ---------  ---------  ----------  ---------  ---------
Net income per share (4).......................                                              $     0.65             $    0.64
                                                                                             ----------             ---------
                                                                                             ----------             ---------
Weighted average common shares outstanding
  (4)..........................................                                                   7,185                 7,185
</TABLE>
<TABLE>
<CAPTION>
                                                                                                  AS OF JUNE 30, 1997
                                                                                         --------------------------------------
<S>                                                                                      <C>        <C>             <C>
                                                                                                                    AS FURTHER
                                                                                                     AS ADJUSTED     ADJUSTED
                                                                                          ACTUAL         (5)            (5)
                                                                                         ---------  --------------  -----------
 
<CAPTION>
                                                                                                     (IN THOUSANDS)
<S>                                                                                      <C>        <C>             <C>
BALANCE SHEET DATA:
Working capital........................................................................  $  19,388    $    3,988     $  49,388
Total assets...........................................................................     55,116        56,416        67,516
Distribution payable...................................................................     --            15,400        --
Notes payable and long-term debt.......................................................     19,352        19,352           452
Stockholders' equity...................................................................     22,865         8,766        54,165
</TABLE>
 
------------------------
(1) Includes income from settlement of license disputes of $0.3 million, $1.5
    million and $1.2 million in 1992, 1993 and 1994, respectively.
 
(2) Before extraordinary gains of $2.2 million in 1992 and $0.4 million in 1994
    related to extinguishment of debt.
 
(3) Reflects historical provision for income taxes in 1992 and pro forma
    provision for income taxes as if the Company had been taxed as a C
    corporation for the years ended December 31, 1993, 1994, 1995 and 1996 and
    the six months ended June 30, 1996 and 1997, respectively.
 
(4) Pro forma income per share is based on the weighted average number of shares
    of Common Stock outstanding plus the estimated number of shares being sold
    by the Company which would be necessary to fund the distribution of earned
    and undistributed S corporation earnings totaling approximately $15.4
    million as of June 30, 1997. See "Use of Proceeds."
 
(5) Adjusted to reflect (i) the liability for the Initial S Corporation
    Distribution consisting of all earned but undistributed S corporation
    earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3
    million of deferred tax assets and corresponding tax benefit determined as
    if the Company's S corporation status had been terminated on June 30, 1997.
    Further adjusted to reflect the sale of 3.8 million shares of Common Stock
    by the Company assuming an initial public offering price of $13.00 and the
    application of approximately $15.4 million of the net proceeds to pay the
    Initial S Corporation Distribution and oustanding borrowings under its
    credit facilities. The Company anticipates that the Subsequent S Corporation
    Distribution (as hereinafter defined) consisting of all earned but
    undistributed S corporation earnings for the period beginning on July 1,
    1997 and ending on the S Termination Date (as hereinafter defined) will be
    between $4.0 million and $5.0 million. See "Use of Proceeds" and "Company
    Organization."
 
                                       6
<PAGE>
                                  RISK FACTORS
 
    PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS OTHER INFORMATION SET FORTH IN
THIS PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE COMMON STOCK. THIS
PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED BY SUCH FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS DISCUSSED IN THIS PROSPECTUS,
INCLUDING THE FACTORS SET FORTH BELOW AND IN "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS," AS
WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS.
 
COMPETITION AND OTHER FACTORS AFFECTING THE APPAREL AND RETAILING INDUSTRIES
 
    The apparel industry is highly competitive, fragmented and subject to
rapidly changing consumer demands and preferences. The Company believes that its
success depends in large part upon its ability to anticipate, gauge and respond
to changing consumer demands and fashion trends in a timely manner and upon the
continued appeal to consumers of the BOSS and Beverly Hills Polo Club brand
names. Failure by the Company to identify and respond appropriately to changing
consumer demands and fashion trends could adversely affect consumer acceptance
of its products and could have a material adverse effect on the Company's
financial condition and results of operations. The Company competes with
numerous apparel manufacturers and distributors, many of which have greater
financial resources than the Company. The Company's products also compete with a
substantial number of designer and non-designer lines. Although the level and
nature of competition differ among its product categories, the Company believes
that it competes primarily on the basis of brand image, quality of design and
value pricing. Increased competition by existing and future competitors could
result in reductions in sales or prices of the Company's products, which could
have a material adverse effect on the Company's financial condition and results
of operations. In addition, the apparel industry historically has been subject
to substantial cyclical variations, and a recession in the general economy or
uncertainties regarding future economic prospects that affect consumer spending
habits could have a material adverse effect on the Company's financial condition
and results of operations.
 
DEPENDENCE UPON THIRD PARTY RIGHTS AND LICENSES
 
    The Company's business is heavily dependent upon its use of the BOSS and
Beverly Hills Polo Club brand names and images, which are in turn dependent upon
the existence and continuation of certain third party rights and covenants. The
Company's right to use the BOSS brand in the manufacture and sale of apparel
will be substantially dependent on third party concurrent use and license
agreements. Pursuant to a recent settlement of litigation among the Company,
Brookhurst, Inc. ("Brookhurst") and certain other parties (the "Settlement"),
and subject to the satisfaction of certain conditions to the closing of the
Settlement, the Company will acquire certain domestic and foreign trademark
common law and registration rights to the BOSS name previously owned by
Brookhurst, the Company's former licensor. The Company will then convey the
foreign rights to the BOSS brand to a third party and receive a license to
continue to manufacture apparel in certain foreign countries using the BOSS
brand for sale in the United States and Puerto Rico. The Company will retain
ownership of domestic rights to the BOSS brand, which will be subject to a
concurrent use agreement. The Company's owned and licensed rights will be
subject to material restrictions on the Company's right to manufacture and sell
apparel using the BOSS brand. The Company's use of the BOSS brand name and image
will be limited to certain specified products at specified price points in the
United States and Puerto Rico. The initial term of the BOSS agreements is four
years; however, such agreements may be extended at the Company's option through
December 31, 2007. The Company is also dependent upon the rights of the licensor
of the Beverly Hills Polo Club brand name in the use of such name on the
Company's products. The Company's licenses for use of the Beverly Hills Polo
Club brand name and image are limited to certain specified products in the
United States, Puerto Rico and Europe and may be extended at the Company's
option through December 31, 2004. There can be no assurance that the Company
will be able to retain its right to use the BOSS And Beverly Hills Polo Club
brand names or enter into comparable arrangements upon the expiration of the
current
 
                                       7
<PAGE>
agreements. In addition, each of the agreements contains provisions that, under
certain circumstances (not all of which are under the Company's control), could
permit the licensor and third parties to terminate the agreements. Such
provisions include, among other things (i) a default in the payment of certain
amounts payable under the applicable agreement that continues beyond the
specified grace period and (ii) the failure to comply with the covenants
contained in the applicable agreement. Any termination could have a material
adverse effect on the Company's financial condition or results of operations. In
addition, under the operative agreements, the licensor and third parties will
retain the right to produce, distribute, advertise and sell, and to authorize
others to produce, distribute, advertise and sell, directly or through others,
certain garments that are similar to some of the Company's products. Any such
production, distribution, advertisement or sale of such garments by such parties
or other authorized parties could have a material adverse effect on the
Company's financial condition or results of operations.
 
    No assurance can be given that others will not assert rights in, or
ownership of, these trademarks or other proprietary rights. If successful on the
merits, such claims could have a material adverse effect on the Company's
financial condition or results of operations. In the event of any litigation
arising from such claim, any claiming party could have significantly greater
resources than the Company to pursue litigation of such claims and the Company
could be forced to incur substantial costs to defend legal actions taken against
it relating to the Company's use of trademarks or other proprietary rights. In
addition, if any such third party is successful in challenging the Company's use
of trademarks, the Company could be forced to pay significant damages or enter
into expensive royalty or licensing arrangements with such third party. See
"Business--License and Other Rights Agreements."
 
RISKS ASSOCIATED WITH ACHIEVING AND MANAGING GROWTH
 
    The Company's net sales have grown substantially over the last three years.
No assurance can be given that the level of net sales will not decline or that
the Company will be successful in increasing net sales in the future. To manage
growth effectively, the Company must anticipate trends, changes in styles and
customer demand, continue to implement changes in certain aspects of its
business, continue to expand its operations (including the development of a new
distribution facility), attract and retain qualified personnel (including
management), and develop, train and manage an increasing number of
management-level and other employees. Any unexpected difficulties encountered
during expansion, including possible delays in the construction and opening of
the Company's new distribution facility, could have a material adverse effect on
the Company's financial condition or results of operations. In addition, the
Company extends credit to its customers and, due to growth, continues to
experience increases in the amount of its outstanding accounts receivable. The
failure to accurately assess the credit risk from its customers, changes in
overall economic conditions and other factors could cause the Company's credit
losses to increase, which could have a material adverse effect on the Company's
financial condition or results of operations.
 
DEPENDENCE UPON UNAFFILIATED MANUFACTURERS; FOREIGN OPERATIONS AND SOURCING
 
    Approximately 70% of the Company's manufacturing needs are currently met
through contracting with third party manufacturers such that the Company is
largely dependent upon independent contractors for the manufacture of its
products. The Company believes that its dependence on independent contractors
will continue to increase. The Company currently contracts with approximately 50
manufacturers in more than 10 countries. The Company does not have long-term
contracts with any manufacturers. During 1996, approximately 9% of the Company's
purchases of raw materials, labor and finished goods for its apparel were made
in Mexico; approximately 28% were made in Asia; approximately 23% were made at
third party facilities elsewhere in the United States; and the balance was made
in Company-operated facilities in the United States. The inability of a
manufacturer to ship the Company's products in a timely manner or to meet the
Company's quality standards could adversely affect the Company's ability to
deliver products to its customers in a timely manner. Delays in delivery caused
by manufacturing delays, disruption in services of delivery carriers or other
factors could result in cancellations of orders, refusals to accept deliveries
or a reduction in purchase prices, any of which could have a material adverse
effect on the Company's financial condition or results of operations. The
Company's operations may also be affected
 
                                       8
<PAGE>
adversely by political instability resulting in the disruption of trade with the
countries in which the Company's contractors are located, the imposition of
additional regulations relating to imports, the imposition of additional duties,
tariff and other charges on imports, significant fluctuations in the value of
the dollar against foreign currencies or restrictions on the transfer of funds.
 
    The Company manufactures a substantial portion of its BOSS brand apparel
through unaffiliated foreign manufacturers and, under the Settlement, the
Company's activities through these manufacturers will be subject to a foreign
manufacturing rights agreement. This agreement contains certain restrictions
governing use of the BOSS brand and the operations of third party manufacturers
over which the Company may have limited control. Any material breach of the
terms of the foreign manufacturing rights agreement could result in a
termination of the Company's rights to manufacture BOSS brand apparel in one or
more foreign countries, or loss of its overall rights to manufacture abroad
under the BOSS brand, either of which could have a material adverse effect on
the Company's financial condition and results of operations. See "-- Dependence
Upon Third Party Rights and Licenses."
 
    The Company's import operations are subject to constraints imposed by
bilateral textile agreements between the United States and a number of foreign
countries. These agreements, which have been negotiated bilaterally either under
the framework established by the Arrangement Regarding International Trade in
Textiles, known as the Multifiber Agreement, or other applicable statutes,
impose quotas on the amounts and types of merchandise that may be imported into
the United States from these countries. These agreements also allow the United
States to impose restraints at any time and on very short notice on the
importation of categories of merchandise that, under the terms of the
agreements, are not currently subject to specified limits. Imported products are
also subject to United States customs duties, which comprise a material portion
of the cost of the merchandise. A substantial increase in customs duties could
have a material adverse effect on the Company's financial condition or results
of operations. The United States and the countries in which the Company's
products are produced or sold may, from time to time, impose new quotas, duties,
tariffs or other restrictions, or adversely adjust prevailing quota, duty or
tariff levels, any of which could have a material adverse effect on the
Company's financial condition or results of operations.
 
    The Company's policy is to notify its independent manufacturers through its
agents of the expectation that such manufacturers operate in compliance with
applicable laws and regulations. While the Company's policies promote ethical
business practices and the Company's staff periodically visits and monitors the
operations of its independent manufacturers, the Company does not control such
manufacturers or their labor practices. The violation of labor or other laws by
an independent manufacturer of the Company or the divergence of an independent
manufacturer's labor practices from those generally accepted as ethical in the
United States could have a material adverse effect on the Company's financial
condition and results of operations. See "Business--Manufacturing and Product
Sourcing."
 
DEPENDENCE UPON KEY PERSONNEL
 
    The success of the Company is largely dependent upon the personal efforts
and abilities of its senior management, particularly Messrs. Robert J. Arnot,
Chairman of the Board and Co-Chief Executive Officer, Gerald W. Lear, President
and Co-Chief Executive Officer, Gary B. Brashers, Vice President-- Manufacturing
and Chief Operating Officer, Eugene C. Wielepski, Vice President--Finance and
Chief Financial Officer, and Thomas P. Ormandy, Vice President--Sales. Effective
upon consummation of the Offering, these individuals, in the aggregate, will
beneficially own approximately 23.4% of the Company's outstanding Common Stock.
The Company has entered into employment agreements with each of these
individuals. See "Management--Employment Agreements." The loss of the services
of one or more of such individuals for an extended period of time could have a
material adverse effect on the Company's financial condition or results of
operations. The Company maintains and is the beneficiary of life insurance
policies in the amount of $1.0 million on the lives of each of Messrs. Arnot,
Lear and Brashers and in the amount of $0.5 million on the life of Mr.
Wielepski.
 
                                       9
<PAGE>
DEPENDENCE UPON CERTAIN CUSTOMERS
 
    The Company's three largest customers accounted for an aggregate of
approximately 20% of net sales in 1996. No single customer or group of related
customers accounted for more than 13.0% of the Company's net sales in 1996. The
retail apparel industry has periodically experienced consolidation and other
ownership changes. In the future, the Company's customers may consolidate,
undergo restructurings, reorganizations or bankruptcies, or realign these
affiliations, any of which could decrease the number of stores that carry the
Company's products or increase the ownership concentration within the retail
apparel industry. See "Business--Customers and Sales."
 
AVAILABILITY AND PRICE OF FABRICS
 
    The Company is dependent upon the ability of its suppliers to furnish
fabrics in sufficient volumes at fair prices and to meet performance, quality
and delivery criteria for its domestic and Mexican pant producers. The Company
does not have any contracts with its suppliers that obligate them to continue
selling fabrics to the Company. If shortages of fabrics occur or if the prices
of these fabrics rise, and if the Company is unable to increase its prices to
recover such costs increases, a material adverse effect on the Company's
financial condition or results of operations could result. See
"Business--Manufacturing and Product Sourcing" and "--Quality Control."
 
ENVIRONMENTAL CONTROLS AND OTHER REGULATORY REQUIREMENTS
 
    The Company is subject to various federal, state and local environmental
laws and regulations governing, among other things, the discharge, storage,
handling and disposal of a variety of hazardous and nonhazardous substances and
wastes used in or resulting from its present and past operations. The Company's
operations also are governed by laws and regulations relating to employee safety
and health, principally the Occupational Safety and Health Act and regulations
thereunder, that, among other things, establish exposure limitations for cotton
dust, formaldehyde, asbestos and noise and regulate chemical and ergonomic
hazards in the workplace. There can be no assurance that regulatory requirements
will not become more stringent in the future or that the Company will not incur
significant costs relating to these matters in the future. See
"Business--Environmental Matters."
 
LACK OF SIGNIFICANT OPERATING HISTORY IN EUROPE
 
    The Company acquired a license to distribute, manufacture and market Beverly
Hills Polo Club brand sportswear in Europe in the third quarter of 1996 and has
had no significant operating history against which to assess the reasonableness
of its strategy to expand sales internationally. The Company's European business
strategy relies heavily upon its ability to align itself with effective
distributors that are able to market the Beverly Hills Polo Club products to
retailers. The Company is also dependent upon the services of contract warehouse
facilities for the timely and accurate shipment of its products to its
distributors and retail stores. A general failure by the Company to maintain and
control its existing international distribution arrangements or to procure
additional international distribution relationships could adversely affect the
Company's growth strategy, which could adversely affect the Company's financial
condition or results of operations. Thus, no assurance can be given that the
Company's international strategy will be successfully and properly implemented.
In addition, due to the Company's utilization of franchise store arrangements in
Europe, the Company's European expansion strategy is also dependent upon
selecting franchisees that can successfully execute a retail strategy.
 
CONTROL BY EXISTING STOCKHOLDERS
 
    Following the consummation of the Offering, the Company's existing
stockholders, all of whom are parties to the Amended and Restated Shareholders'
Agreement (the "Restated Shareholders' Agreement"), will beneficially own an
aggregate of approximately 61.2% of the outstanding Common Stock. Accordingly,
such stockholders will have the ability to control the election of directors and
the results of other matters submitted to a vote of stockholders. Such
concentration of ownership, together with the Restated Shareholders' Agreement
and the anti-takeover effects of certain provisions in the Delaware
 
                                       10
<PAGE>
General Corporation Law and in the Company's Amended and Restated Certificate of
Incorporation (the "Restated Certificate") and Amended and Restated By-laws (the
"Restated By-laws"), may have the effect of delaying or preventing a change in
control of the Company. See "--Anti-Takeover Provisions," "Description of
Capital Stock" and "Certain Transactions--Restated Shareholders' Agreement."
 
ANTI-TAKEOVER PROVISIONS
 
    The Company's Restated Certificate and Restated By-laws include provisions
that may have the effect of discouraging a non-negotiated takeover of the
Company and preventing certain changes of control. These provisions, among other
things (i) classify the Company's Board of Directors into three classes serving
staggered, three-year terms, (ii) permit the Company's Board of Directors,
without further stockholder approval, to issue up to 5.0 million shares of
preferred stock with rights and preferences determined by the Board of Directors
at the time of issuance, (iii) require a 66 2/3% vote of the Company's
stockholders to approve any amendment, addition, or termination of the Restated
By-laws of the Company and (iv) restrict the ability of stockholders to call
special meetings of the stockholders, nominate individuals for election to the
Board of Directors, or submit stockholder proposals. The Restated Shareholders'
Agreement designates Messrs. Robert J. Arnot, Gerald W. Lear, Ira J. Hechler and
Jon Hechler as principal shareholders (the "Principal Shareholders") and
provides that the other stockholders subject to the Restated Shareholders'
Agreement (the "Non-Principal Shareholders") shall vote, in elections of
directors to fill Class I or Class II of the Board of Directors, for nominees of
the Principal Shareholders. In addition, pursuant to the terms of the Company's
agreement for use of the BOSS brand name, certain specified changes in the
control of ownership of the Company may result in termination of such agreement.
The Restated Shareholders' Agreement also provides for certain rights of first
refusal and "drag along" rights. The provisions of the Restated Certificate, the
Restated By-laws and the Restated Shareholders' Agreement might, therefore, have
the effect of inhibiting stockholders' ability to realize the maximum value for
their shares of Common Stock that might otherwise be realized because of a
merger or other event affecting the control of the Company. See "Description of
Capital Stock" and "Certain Transactions--Restated Shareholders' Agreement."
 
DILUTION
 
    The initial public offering price is substantially higher than the book
value per share of Common Stock. Investors purchasing shares of Common Stock in
the Offering will therefore incur immediate and substantial dilution of $7.80
per share. See "Dilution."
 
ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
 
    Prior to the Offering, there has been no public market for the Common Stock,
and there can be no assurance that an active trading market will develop or be
sustained. The initial public offering price of the Common Stock offered hereby
will be determined through negotiations among the Company and the Underwriters
and may bear no relationship to the market price for the Common Stock after the
Offering. Subsequent to the Offering, prices for the Common Stock will be
determined by the market and may be influenced by a number of factors, including
depth and liquidity of the market for the Common Stock, investor perceptions of
the Company, changes in conditions or trends in the Company's industry or in the
industry of the Company's significant customers, publicly traded comparable
companies and general economic and other conditions. See "Underwriting."
 
FUTURE SALES BY EXISTING STOCKHOLDERS; SHARES ELIGIBLE FOR FUTURE SALE
 
    The Common Stock offered hereby will be freely tradable (other than by an
"affiliate" of the Company as such term is defined in the Securities Act of
1933, as amended ( the "Securities Act")) without restriction or registration
under the Securities Act. Immediately after the Offering, the Company's existing
stockholders will beneficially own an aggregate of approximately 61.2% of the
outstanding Common Stock. Subject to the restrictions set forth below, such
stockholders will be free to sell such shares from time to time to take
advantage of favorable market conditions or for any other reason. Future sales
of shares of
 
                                       11
<PAGE>
Common Stock by the Company and/or its stockholders could adversely affect the
prevailing market price of the Common Stock. The Company and each of its
executive officers, directors and stockholders beneficially owning in the
aggregate 6.0 million shares of Common Stock have entered into lock-up
agreements with The Robinson-Humphrey Company, LLC and Legg Mason Wood Walker,
Incorporated, as representatives of the Underwriters, pursuant to which they
have agreed not to, directly or indirectly, sell, offer to sell, contract to
sell, solicit an offer to buy, grant any option for the purchase or sale of,
assign, pledge, distribute or otherwise transfer, dispose of or encumber any of
their shares of Common Stock (other than those being sold pursuant to this
Offering) or any securities convertible into or exercisable or exchangeable for
shares of Common Stock without the prior written consent of the representatives
of the Underwriters, for a period of 180 days after the date of this Prospectus.
In addition, certain restrictions on transfers of shares of Common Stock by the
existing stockholders of the Company are contained in the Restated Shareholders'
Agreement. Thereafter, approximately 5.96 million shares of Common Stock will be
eligible for sale pursuant to Rule 144 promulgated under the Securities Act.
Sales of substantial amounts of Common Stock in the public market, or the
perception that such sales may occur, could have a material adverse effect on
the market price of the Common Stock. See "Shares Eligible for Future Sale,"
"Underwriting" and "Certain Transactions--Restated Shareholders' Agreement."
 
FORWARD-LOOKING STATEMENTS
 
    This Prospectus contains certain forward-looking statements including, among
other things, the Company's anticipated growth strategies, the Company's
intention to continue to develop new products under the BOSS and Beverly Hills
Polo Club brand names, the Company's future expenditures on capital projects and
advertising, construction and opening of the Company's new distribution
facility, continued operation under the license and third party agreements
relating to the BOSS and Beverly Hills Polo Club brands, European expansion, the
Company's ability to limit credit risk exposure to its customers and other
aspects of the business of the Company. These forward-looking statements are
subject to risks and uncertainties, many of which are beyond the Company's
control, which could cause actual results to differ materially from those
contemplated in such forward-looking statements, including in particular the
risks and uncertainties described under "Risk Factors," including, among other
things (i) changes in the marketplace for the Company's products, including
consumer tastes, (ii) the introduction of new products or pricing changes by the
Company's competitors, (iii) changes in the economy and (iv) termination of one
or more of its agreements for use of the BOSS and Beverly Hills Polo Club brand
names in the manufacture and sale of the Company's products. Prospective
investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly update or revise any of these forward-looking statements,
whether as a result of new information, future events or circumstances or
otherwise. There can be no assurance that the events described in these
forward-looking statements will occur.
 
                              COMPANY ORGANIZATION
 
BACKGROUND
 
    The Company was founded by Mr. Isaac C. Isaacs in Baltimore, Maryland in
1913. It remained a family-owned business until 1984, when it was reorganized as
I.C. Isaacs & Company L.P. (the "Partnership") by a group comprised of
management and outside investors. Since that time, the Company has operated as
the Partnership's general partner. Ira J. Hechler, a director and stockholder of
the Company, is currently the Partnership's limited partner. The business of the
Company is conducted through the Partnership. Upon consummation of the Offering,
the Company's wholly-owned subsidiary, Isaacs Design, Inc., will become the
limited partner of the Partnership. See "--The Reorganization."
 
PRIOR S CORPORATION STATUS
 
    Since January 1, 1993, the Company has elected to be treated for federal and
state income tax purposes as an S corporation under Subchapter S of the Internal
Revenue Code of 1986, as amended (the "Code"), and under comparable state laws.
As a result, the Company's stockholders, rather than the
 
                                       12
<PAGE>
Company, have been taxed directly on the income of the Company for federal and
certain state income tax purposes, whether or not such income was distributed.
One day prior to the consummation of the transactions related to the Offering,
the Company's S corporation status will be terminated (the "S Termination
Date").
 
    On the S Termination Date the Company will declare the following dividend
distributions to the stockholders of record of the Company: (i) a dividend
distribution in the aggregate amount of approximately $15.4 million, which
represents all earned but undistributed S corporation earnings of the Company as
of June 30, 1997 (the "Initial S Corporation Distribution"); and (ii) a dividend
distribution in the aggregate amount of the Company's earned but undistributed S
corporation earnings for the period beginning on July 1, 1997 and ending on the
S Termination Date (the "Subsequent S Corporation Distribution" and, together
with the Initial S Corporation Distribution, the "S Corporation Distribution").
Only stockholders of record as of the S Termination Date will participate in the
S Corporation Distribution. The Initial S Corporation Distribution is expected
to be paid on the date of consummation of the transactions relating to the
Offering (the "Closing Date"); the Subsequent S Corporation Distribution is
expected to be paid within 30 days after the Closing Date. The Company expects
to pay the S Corporation Distribution with a portion of the net proceeds from
this Offering. See "Use of Proceeds." On and after the S Termination Date, the
Company will no longer be treated as an S corporation and, accordingly, will be
fully subject to federal and state income taxes. See "Capitalization" and
Summary of Accounting Policies to the Company's consolidated financial
statements.
 
THE REORGANIZATION
 
    Prior to the Closing Date, the Company will (i) form a wholly-owned
subsidiary, Isaacs Design, Inc., which will acquire the outstanding 1% limited
partnership interest in the Partnership from Ira J. Hechler in exchange for
approximately $280,000 in cash, which is an amount equal to the book value of
that interest, (ii) file with the Secretary of State of Delaware an Amended and
Restated Certificate of Incorporation changing the authorized shares of capital
of the Company from 20,000 shares of common stock, par value $1.00 per share
("Old Common Stock"), to 50.0 million shares of Common Stock, par value $.0001
per share (the "Common Stock"), and 5.0 million shares of preferred stock, par
value $.0001 per share (the "Preferred Stock"), (iii) effect a 370.4847 for 1
stock split and (iv) declare a dividend in the amount of the S Corporation
Distribution. All of such transactions are referred to collectively herein as
the "Reorganization."
 
                                USE OF PROCEEDS
 
    The net proceeds to be received by the Company from the Offering are
estimated to be approximately $45.4 million, assuming an initial public offering
price of $13.00 (the mid-point of the range set forth on the cover page of this
Prospectus) and after deducting the estimated underwriting discount and offering
expenses payable by the Company. The Company intends to use such net proceeds as
follows: (i) to repay approximately $20.0 million of the Company's outstanding
borrowings under its credit facilities; (ii) to pay the S Corporation
Distribution (estimated to be between $19.0 million and $20.0 million); and
(iii) for general corporate and working capital purposes. The Company's credit
facilities consist of a $1.0 million term loan, which will mature on June 30,
2001 and has an annual interest rate equal to the prime rate of interest plus
2.5%, and a revolving line of credit, which will mature on June 30, 1998 and has
an annual interest rate equal to the prime rate of interest plus 1.0%. Amounts
outstanding under the Company's credit facilities were used for working capital
purposes. Pending application of the net proceeds as described above, the
Company will invest the net proceeds in short-term, interest bearing instruments
or other investment grade securities. See "Company Organization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
 
                                       13
<PAGE>
                                DIVIDEND POLICY
 
    Since January 1, 1993, the Company has elected to be treated for federal and
state income tax purposes as an S corporation. As a result, the Company's
stockholders, rather than the Company, have been taxed directly on the earnings
of the Company for federal and certain state income tax purposes, whether or not
such earnings were distributed. In 1995, 1996 and thus far in 1997, the Company
made cash distributions to its stockholders in the amounts of $2.9 million, $3.2
million and $6.4 million, respectively, all of which were used to fund the
stockholders' tax obligations as a result of the Company's status as an S
corporation. One day prior to the Closing Date, the Company's S corporation
status will be terminated. See "Company Organization."
 
    The Company anticipates that, after payment of the S Corporation
Distribution to stockholders of record as of the S Termination Date, all
earnings of the Company will be retained for the foreseeable future for use in
the operations of the Company's business. Purchasers of shares of Common Stock
in the Offering will not receive any portion of the S Corporation Distribution.
Any future determination as to the payment of dividends will be at the
discretion of the Company's Board of Directors and will depend upon the
Company's results of operations, financial condition, contractual restrictions
and other factors deemed relevant by the Board of Directors.
 
                                       14
<PAGE>
                                 CAPITALIZATION
 
    The following table sets forth the capitalization of the Company (i) as of
June 30, 1997, (ii) as adjusted as of that date to give effect to the Initial S
Corporation Distribution, termination of the Company's S corporation status and
the recording of an estimated $1.3 million of net deferred tax assets determined
as if the Company's S corporation status had been terminated on June 30, 1997
and (iii) as further adjusted to reflect the sale of 3.8 million shares of
Common Stock by the Company in the Offering at an assumed initial public
offering price of $13.00 per share (the mid-point of the range set forth on the
cover page of this Prospectus), after deducting the estimated underwriting
discount and offering expenses payable by the Company, and the application of
the estimated net proceeds therefrom to pay the Initial S Corporation
Distribution, outstanding borrowings under the credit facilities and the
application of the remainder of the net proceeds as further described under "Use
of Proceeds." The information below should be read in conjunction with the
Company's consolidated financial statements and the related notes thereto, which
are included elsewhere in this Prospectus.
 
<TABLE>
<CAPTION>
                                                                                     AS OF JUNE 30, 1997
                                                                            -------------------------------------
                                                                                            AS        AS FURTHER
                                                                             ACTUAL     ADJUSTED(1)   ADJUSTED(2)
                                                                            ---------  -------------  -----------
<S>                                                                         <C>        <C>            <C>
                                                                                       (IN THOUSANDS)
Short-term debt:
  Current maturities of term loan and revolving line of credit............  $  18,300    $  18,300     $  --
  Current maturities of capital lease obligations.........................        179          179           179
                                                                            ---------  -------------  -----------
    Total short-term debt.................................................  $  18,479    $  18,479           179
                                                                            ---------  -------------  -----------
                                                                            ---------  -------------  -----------
Distribution payable......................................................  $  --        $  15,400     $  --
                                                                            ---------  -------------  -----------
                                                                            ---------  -------------  -----------
 
Long-term debt:
  Term loan, net of current maturities....................................        600          600        --
  Capital lease obligations...............................................        273          273           273
                                                                            ---------  -------------  -----------
    Total long-term debt..................................................        873          873           273
 
Stockholders' equity:
  Preferred Stock, par value $.0001 per share, 5,000,000 shares                --           --            --
    authorized, none issued and outstanding...............................
  Common Stock, par value $.0001 per share, 50,000,000 shares authorized,           1            1             1
    6,037,048 shares issued; 6,000,000 shares outstanding, 9,837,048
    shares issued and outstanding as further adjusted(3)..................
  Additional paid-in capital..............................................        266          266        45,666
  Retained earnings.......................................................     22,613        8,513         8,513
  Treasury stock, at cost (37,048 shares).................................        (15)         (15)          (15)
                                                                            ---------  -------------  -----------
    Total stockholders' equity............................................     22,865        8,766        54,165
                                                                            ---------  -------------  -----------
    Total capitalization..................................................  $  23,738    $   9,639     $  54,438
                                                                            ---------  -------------  -----------
                                                                            ---------  -------------  -----------
</TABLE>
 
------------------------------
 
(1) The as-adjusted amounts reflect the liability for the Initial S Corporation
    Distribution to the stockholders of approximately $15.4 million, which
    represents the earned but undistributed S corporation earnings as of June
    30, 1997, the termination of the Company's S corporation status and the
    recording of an estimated $1.3 million of net deferred tax assets. See "Use
    of Proceeds" and "Company Organization."
 
(2) Adjusted to reflect (i) the liability for the Initial S Corporation
    Distribution consisting of all earned but undistributed S corporation
    earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3
    million of net deferred tax assets determined as if the Company's S
    corporation status had been terminated on June 30, 1997. Further adjusted to
    reflect the sale of 3.8 million shares of Common Stock by the Company
    assuming an initial public offering price of $13.00 and the application of
    approximately $15.4 million of the net proceeds to pay the Initial S
    Corporation Distribution and outstanding borrowings under its credit
    facilities. See "Use of Proceeds" and "Company Organization."
 
(3) Excludes 500,000 shares of Common Stock reserved for issuance pursuant to
    awards under the 1997 Omnibus Stock Plan (the "Plan"). See
    "Management--Employment Agreements" and "--1997 Omnibus Stock Plan."
 
                                       15
<PAGE>
                                    DILUTION
 
    The net tangible book value of the Company at June 30, 1997 was
approximately $21.0 million, or $3.51 per share of Common Stock. After giving
effect to the Reorganization and the Initial S Corporation Distribution, as if
the distribution had been recorded as of June 30, 1997 and the Company's S
corporation status had terminated at such date, the as adjusted net tangible
book value of the Company at June 30, 1997 would have been approximately $5.6
million or $0.93 per share of Common Stock. After giving effect to the sale by
the Company of shares of Common Stock in the Offering at an assumed initial
public offering price of $13.00 per share (the mid-point of the range set forth
on the cover page of this Prospectus) and after deducting the estimated
underwriting discount and offering expenses payable by the Company and the
application of the estimated net proceeds therefrom to pay the Initial S
Corporation Distribution, the as further adjusted net tangible book value of the
Company at June 30, 1997 would have been approximately $51.0 million, or $5.20
per share. See "Company Organization" and "Use of Proceeds." This represents an
immediate increase in net tangible book value of $4.27 per share to the
Company's existing stockholders and an immediate net tangible book value
dilution of $7.80 per share to investors purchasing shares in the Offering. The
following table illustrates this per share dilution:
 
<TABLE>
<S>                                                           <C>        <C>
Initial public offering price per share (1).................             $   13.00
 
  Net tangible book value per share at June 30, 1997........  $    3.51
 
  Decrease attributable to pro forma adjustments............      (2.58)
                                                              ---------
 
  As adjusted net tangible book value per share at June 30,
  1997......................................................        .93
 
  Increase attributable to new investors in the Offering....       4.27
                                                              ---------
 
Net tangible book value, as further adjusted, per share
  after the Offering (2)....................................                  5.20
                                                                         ---------
 
Dilution per share to new investors.........................             $    7.80
                                                                         ---------
                                                                         ---------
</TABLE>
 
    The following table summarizes, on a pro forma basis as of June 30, 1997,
the number of shares of Common Stock purchased from the Company, the total
consideration paid and the average consideration paid per share by the existing
stockholders and by the new investors, assuming an initial public offering price
of $13.00 per share but before deducting the underwriting discount and estimated
offering expenses:
 
<TABLE>
<CAPTION>
                                                         SHARES PURCHASED         TOTAL CONSIDERATION
                                                      -----------------------  --------------------------  AVERAGE PRICE
                                                        NUMBER      PERCENT       AMOUNT        PERCENT      PER SHARE
                                                      ----------  -----------  -------------  -----------  -------------
 
<S>                                                   <C>         <C>          <C>            <C>          <C>
Existing stockholders...............................   6,000,000        61.2%  $     252,113         0.5%    $    0.04
 
New investors.......................................   3,800,000        38.8      49,400,000         99.5    $   13.00
                                                      ----------       -----   -------------      -----
 
  Total.............................................   9,800,000       100.0%  $  49,652,113       100.0%
                                                      ----------       -----   -------------      -----
                                                      ----------       -----   -------------      -----
</TABLE>
 
------------------------
 
(1) Before deducting estimated underwriting discounts and commissions and
    estimated expenses of the Offering payable by the Company.
 
(2) Excludes 500,000 shares of Common Stock reserved for issuance pursuant to
    awards under the Plan. See "Management--1997 Omnibus Stock Plan."
 
                                       16
<PAGE>
                            SELECTED FINANCIAL DATA
 
    The selected financial data set forth below have been derived from the
consolidated financial statements of the Company and the related notes thereto.
The statement of income data for the years ended December 31, 1994, 1995 and
1996 and the balance sheet data as of December 31, 1995 and 1996 are derived
from the consolidated financial statements of the Company, which have been
audited by BDO Seidman, LLP, independent certified public accountants, and which
are contained elsewhere in this Prospectus. The statement of income data for the
years ended December 31, 1992 and 1993 and the balance sheet data as of December
31, 1992, 1993 and 1994 are derived from the consolidated financial statements
of the Company, which have been audited but are not contained herein. Financial
data as of June 30, 1997, and for the six months ended June 30, 1996 and 1997,
are derived from consolidated financial statements which are unaudited but, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of such data. The
results of operations for the six months ended June 30, 1997 are not necessarily
indicative of the results to be expected for the entire year. The following
selected financial data should be read in conjunction with the Company's
consolidated financial statements and the related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                     -----------------------------------------------------
                                                                       1992       1993       1994       1995       1996
                                                                     ---------  ---------  ---------  ---------  ---------
<S>                                                                  <C>        <C>        <C>        <C>        <C>
                                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF INCOME DATA:
Net sales..........................................................  $  62,232  $  72,414  $  85,298  $  93,271  $ 118,655
Cost of sales......................................................     48,051     54,880     62,216     68,530     84,421
                                                                     ---------  ---------  ---------  ---------  ---------
  Gross profit.....................................................     14,181     17,534     23,082     24,741     34,234
Selling expenses...................................................      6,679      9,035     10,474     12,101     16,715
Distribution and shipping expenses.................................      3,756      4,276      2,046      2,379      2,669
General and administrative expenses................................      1,847      1,903      5,813      5,787      6,243
Recovery of legal fees.............................................     --         --         --         --           (718)
                                                                     ---------  ---------  ---------  ---------  ---------
  Operating income.................................................      1,899      2,320      4,749      4,474      9,325
Interest, net......................................................        997      1,260      1,191      1,247      1,365
Other income (expense) (1).........................................         55      1,215      1,235         (3)        85
Minority interest..................................................     --         --            (53)       (33)       (82)
                                                                     ---------  ---------  ---------  ---------  ---------
Income before extraordinary item...................................        957      2,275      4,740      3,191      7,963
Extraordinary item (2).............................................      2,227     --            389     --         --
                                                                     ---------  ---------  ---------  ---------  ---------
  Net income.......................................................  $   3,184  $   2,275  $   5,129  $   3,191  $   7,963
                                                                     ---------  ---------  ---------  ---------  ---------
                                                                     ---------  ---------  ---------  ---------  ---------
 
PRO FORMA STATEMENT OF INCOME DATA:
Income before income taxes.........................................      3,184      2,275      5,129      3,191      7,963
Income tax provision (3)...........................................      1,236        933      2,103      1,308      3,265
                                                                     ---------  ---------  ---------  ---------  ---------
  Net income.......................................................  $   1,948  $   1,342  $   3,026  $   1,883  $   4,698
                                                                     ---------  ---------  ---------  ---------  ---------
                                                                     ---------  ---------  ---------  ---------  ---------
Net income per share (4)...........................................                                              $    0.65
                                                                                                                 ---------
                                                                                                                 ---------
Weighted average common shares outstanding (4).....................                                                  7,185
 
<CAPTION>
                                                                       SIX MONTHS ENDED
                                                                     --------------------
                                                                     JUNE 30,   JUNE 30,
                                                                       1996       1997
                                                                     ---------  ---------
<S>                                                                  <C>        <C>
 
STATEMENT OF INCOME DATA:
Net sales..........................................................  $  51,899  $  77,710
Cost of sales......................................................     36,224     52,021
                                                                     ---------  ---------
  Gross profit.....................................................     15,675     25,689
Selling expenses...................................................      8,057     11,630
Distribution and shipping expenses.................................      1,227      1,978
General and administrative expenses................................      2,734      3,376
Recovery of legal fees.............................................     --           (117)
                                                                     ---------  ---------
  Operating income.................................................      3,657      8,822
Interest, net......................................................        660        922
Other income (expense) (1).........................................         82         22
Minority interest..................................................        (31)       (79)
                                                                     ---------  ---------
Income before extraordinary item...................................      3,048      7,843
Extraordinary item (2).............................................     --         --
                                                                     ---------  ---------
  Net income.......................................................  $   3,048  $   7,843
                                                                     ---------  ---------
                                                                     ---------  ---------
PRO FORMA STATEMENT OF INCOME DATA:
Income before income taxes.........................................      3,048      7,843
Income tax provision (3)...........................................      1,250      3,216
                                                                     ---------  ---------
  Net income.......................................................  $   1,798  $   4,627
                                                                     ---------  ---------
                                                                     ---------  ---------
Net income per share (4)...........................................             $    0.64
                                                                                ---------
                                                                                ---------
Weighted average common shares outstanding (4).....................                 7,185
</TABLE>
<TABLE>
<CAPTION>
                                                                                                          AS OF JUNE 30, 1997
                                                                    DECEMBER 31,                       --------------------------
                                                -----------------------------------------------------                   AS
                                                  1992       1993       1994       1995       1996      ACTUAL     ADJUSTED (5)
                                                ---------  ---------  ---------  ---------  ---------  ---------  ---------------
<S>                                             <C>        <C>        <C>        <C>        <C>        <C>        <C>
                                                                                 (IN THOUSANDS)
BALANCE SHEET DATA:
Working capital...............................  $   5,343  $   6,787  $  10,035  $  10,807  $  16,274  $  19,388     $   3,988
Total assets..................................     24,443     27,201     30,103     31,764     37,257     55,116        56,416
Distribution payable..........................     --         --         --         --         --         --            15,400
Total debt....................................      8,640      9,405      8,798      8,645      7,796     19,352        19,352
Stockholders' equity..........................      9,924     10,824     14,428     14,645     19,393     22,866         8,766
 
<CAPTION>
 
                                                  AS FURTHER
                                                 ADJUSTED (5)
                                                ---------------
<S>                                             <C>
 
BALANCE SHEET DATA:
Working capital...............................     $  49,388
Total assets..................................        67,516
Distribution payable..........................        --
Total debt....................................           452
Stockholders' equity..........................        54,165
</TABLE>
 
------------------------
(1) Includes income from settlement of license disputes of $0.3 million, $1.5
    million and $1.2 million in 1992, 1993 and 1994, respectively.
(2) In connection with the early extinguishment of certain debt, the Company
    recorded an extraordinary gain of $2.2 million and $0.4 million in 1992 and
    1994, respectively.
(3) Reflects historical provision for income taxes in 1992 and pro forma
    provision for income taxes as if the Company had been taxed as a C
    corporation for the years ended December 31, 1993, 1994, 1995 and 1996 and
    the six months ended June 30, 1996 and 1997, respectively.
(4) Pro forma income per share is based on the weighted average number of shares
    of Common Stock outstanding plus the estimated number of shares being sold
    by the Company which would be necessary to fund the distribution of earned
    and undistributed S corporation earnings totaling approximately $15.4
    million as of June 30, 1997.
(5) Adjusted to reflect (i) the liability for the Initial S Corporation
    Distribution consisting of all earned but undistributed S corporation
    earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3
    million of net deferred tax assets determined as if the Company's S
    corporation status had been terminated on June 30, 1997. Further adjusted to
    reflect the sale of 3.8 million shares of Common Stock by the Company
    assuming an initial public offering price of $13.00 and the application of
    approximately $15.4 million of the net proceeds to pay the Initial S
    Corporation Distribution and outstanding borrowings under its credit
    facilities.
 
                                       17
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
    THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
"SELECTED FINANCIAL DATA" AND THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS
AND THE RELATED NOTES THERETO, WHICH ARE INCLUDED ELSEWHERE IN THIS PROSPECTUS.
 
OVERVIEW
 
    During its first 77 years, the Company became one of the leading
manufacturers of pants, trousers and jeans in the United States. The Company was
able to utilize its fabric sourcing and manufacturing expertise to build a well
known franchise in the men's and women's bottoms segment of the apparel
industry. In this period, the Company's marketing efforts were typically driven
by its manufacturing capabilities, and branding was limited to Company-owned
brands and third-party private labels.
 
    In the late 1980's, management made a decision to change the Company's
marketing focus from a manufacturing-driven to a brand-driven strategy. This
fundamental shift within the Company reflected senior management's belief that
the American sportswear market would be dominated by recognized brands with
clearly established images. Management also concluded that increasing market
share would go to those companies that were market-driven and able to service
their customers with diversified manufacturing and sourcing capabilities.
Recognizing its strength in bottoms manufacturing, in 1990 the Company entered
into a license agreement for the exclusive use of the BOSS brand name on men's
denim apparel and on all types of juniors' sportswear for the young women's
market. In 1994, the Company expanded its license agreement to include use of
the BOSS brand name on men's, women's, boys' and youth sportswear in the United
States and Puerto Rico. In 1997, the Company's rights to manufacture and market
BOSS sportswear were further expanded to allow broader product offerings and
significant Company control over styling, advertising and distribution. In the
fall of 1993, the Company entered into license agreements for the use of the
Beverly Hills Polo Club brand name on men's and women's sportswear in the United
States and Puerto Rico. License rights were expanded to include Europe in 1996
and to include men's dress shirts in 1997. See "Business--License and Other
Rights Agreements." The Company also manufactures and markets women's sportswear
under its own "I.C. Isaacs," "Lord Isaacs" and "Pizzazz" brand names and under
third-party private labels.
 
    Over the past three years, the Company has completed its strategic
repositioning from a manufacturing-driven company to a marketing and
brand-driven company. Through a focused strategy of providing fashionable,
branded merchandise at value prices, the Company has emerged as a significant
fashion influence for youthful consumers who purchase sportswear through
specialty and department stores. The Company's brand-driven market strategy is
evidenced by the increase of licensed, branded apparel as a percentage of the
Company's net sales. In 1996, the BOSS and Beverly Hills Polo Club brands
comprised 72.6% and 12.0% of net sales, respectively. Concurrent with this
strategy, the Company has also shifted its product mix from predominately
bottoms to a full array of sportswear, including tops and outerwear. As a
result, net sales of the BOSS tops and outerwear lines have more than doubled
since 1994 to approximately $29 million in 1996. The Company has also expanded
its branded lines to include sportswear for boys, youth and juniors. The
Company's growth is also demonstrated by the increase in its backlog. As of June
30, 1997, the Company had unfilled orders of approximately $60 million, compared
to approximately $43 million of such orders as of June 30, 1996. The Company
expects to fill substantially all of these orders in 1997. See
"Business--Backlog and Seasonality." The following table sets forth, for the
periods indicated, the Company's net sales categorized by brand and product
category:
 
                                       18
<PAGE>
<TABLE>
<CAPTION>
                                                                                                     SIX MONTHS ENDED
                                                                      YEAR ENDED DECEMBER 31,            JUNE 30,
                                                                  -------------------------------  --------------------
<S>                                                               <C>        <C>        <C>        <C>        <C>
                                                                    1994       1995       1996       1996       1997
                                                                  ---------  ---------  ---------  ---------  ---------
 
<CAPTION>
                                                                                     (IN THOUSANDS)
<S>                                                               <C>        <C>        <C>        <C>        <C>
MEN'S(1)
BOSS Bottoms....................................................  $  37,724  $  37,234  $  44,667  $  21,224  $  29,075
BOSS Tops.......................................................      6,709     15,883     29,284     11,268     19,447
BOSS Boys'......................................................      1,834      3,264      6,736      2,055      6,771
Men's BHPC......................................................      2,795      5,219     12,226      4,598     11,822
Men's Private Label.............................................      3,227      4,299        500        427         50
                                                                  ---------  ---------  ---------  ---------  ---------
    Men's total.................................................     52,289     65,898     93,414     39,572     67,165
                                                                  ---------  ---------  ---------  ---------  ---------
WOMEN'S(1)
BOSS Juniors'(2)................................................      9,528      5,423      5,413      3,464      1,954
Women's BHPC....................................................      1,047      1,833      2,043        774        819
Women's Other(3)................................................     22,433     20,116     17,786      8,089      7,772
                                                                  ---------  ---------  ---------  ---------  ---------
    Women's total...............................................     33,009     27,373     25,242     12,327     10,545
                                                                  ---------  ---------  ---------  ---------  ---------
    Total net sales.............................................  $  85,298  $  93,271  $ 118,655  $  51,899  $  77,710
                                                                  ---------  ---------  ---------  ---------  ---------
                                                                  ---------  ---------  ---------  ---------  ---------
</TABLE>
 
------------------------
 
(1) The net sales totals incorporate product returns allocated in proportion to
    gross sales.
 
(2) Results for the year ended December 31, 1994 include approximately $2.5
    million of net sales of tee shirts and sweatshirts with unisex styling that
    were discontinued after the Company obtained a license to manufacture and
    sell men's BOSS tops in the fourth quarter of 1994. As a result, these
    products were recategorized in men's BOSS tops in 1995 and thereafter.
 
(3) Includes Company-owned brands and third-party private labels.
 
RESULTS OF OPERATIONS
 
    The following table sets forth, for the periods indicated, the percentage
relationship to net sales of certain items in the Company's consolidated
statements of income for the periods shown below:
 
<TABLE>
<CAPTION>
                                                                                                SIX MONTHS ENDED
                                                                YEAR ENDED DECEMBER 31,             JUNE 30,
                                                           ---------------------------------  --------------------
<S>                                                        <C>        <C>        <C>          <C>        <C>
                                                             1994       1995       1996(1)      1996      1997(1)
                                                           ---------  ---------  -----------  ---------  ---------
Net sales................................................      100.0%     100.0%      100.0%      100.0%     100.0%
Cost of sales............................................       72.9       73.5        71.1        69.8       66.9
                                                           ---------  ---------       -----   ---------  ---------
Gross profit.............................................       27.1       26.5        28.9        30.2       33.1
Selling expenses.........................................       12.3       13.0        14.1        15.5       15.0
Distribution and shipping expenses.......................        2.4        2.6         2.3         2.4        2.5
General and administrative expenses......................        6.8        6.2         4.7         5.3        4.2
                                                           ---------  ---------       -----   ---------  ---------
Operating income.........................................        5.6%       4.7%        7.8%        7.0%      11.4%
                                                           ---------  ---------       -----   ---------  ---------
                                                           ---------  ---------       -----   ---------  ---------
</TABLE>
 
------------------------
 
(1) Includes the receipt in 1996 and 1997 of approximately $0.7 million and $0.1
    million, respectively, related to an agreement with the Company's insurance
    carrier to reimburse it for legal fees associated with litigation billed in
    prior years.
 
                                       19
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
 
    NET SALES.  Net sales increased 49.7% to $77.7 million in the six months
ended June 30, 1997 from $51.9 million in the six months ended June 30, 1996.
Substantially all of this increase was due to higher volume shipments of BOSS
and Beverly Hills Polo Club sportswear. Net sales of BOSS sportswear increased
$19.2 million or 50.5% to $57.2 million primarily driven by strong growth in the
men's tops, boys' and youth segments and continued strength of the jeans
segment. Net sales of the BOSS tops segment were $19.4 million in the six months
ended June 30, 1997 versus $11.3 million in the six months ended June 30, 1996.
Net sales of Beverly Hills Polo Club sportswear increased $7.2 million or 133.3%
to $12.6 million over the same period, primarily driven by strong growth in the
men's business. International sales were insignificant in the six months ended
June 30, 1997. Although international orders were received in the first quarter
of 1997, the Company began to fulfill such orders in April, 1997.
 
    GROSS PROFIT.  Gross profit increased 63.7% to $25.7 million in the six
months ended June 30, 1997 from $15.7 million in the six months ended June 30,
1996. Gross profit as a percentage of sales increased to 33.1% from 30.2% over
the same period. The increase in gross margin was due in part to the expansion
of the BOSS tops product line, which typically carries a higher gross margin
than the bottoms product line. In addition, the tops line had improved gross
margins due to reduced costs on imported tops resulting from volume purchase
discounts. Also, the continued shift of production of denim bottoms from the
United States to Mexico and the accompanying decrease in labor and overhead
costs contributed to the improved gross margin. The Company's improved gross
margin was also a result of increased sales of products at full margin,
particularly in the first quarter, offset somewhat by markdowns taken in the
second quarter related to unsold spring and summer goods.
 
    SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling,
distribution, general and administrative ("SG&A") expenses increased 40.8% to
$16.9 million in the six months ended June 30, 1997 from $12.0 million in the
six months ended June 30, 1996. As a percentage of net sales SG&A expenses
decreased to 21.7% from 23.2% over the same period. This improvement reflects
overall declines in SG&A expenses resulting from cost containment efforts in
certain expense areas and expense leverage associated with the Company's growth.
Selling expenses increased $3.5 million to $11.6 million as a result of higher
commissions to the Company's salespersons and higher royalty payments as sales
of branded apparel continued to increase as a percentage of overall net sales.
The Company believes that its royalty expense will continue to increase as the
percentage of net sales of branded products increase. Advertising costs rose
$0.3 million to $1.6 million over the same period as the Company continued to
focus on enhancing the identity and image of its brands through increased media
exposure. Distribution and shipping expenses increased $0.8 million to $2.0
million due to higher unit shipments and increased overtime costs. The Company
opted to incur additional overtime wages rather than adding personnel to process
the increase in unit shipments. General and administrative expenses rose $0.6
million to $3.3 million due to salary increases for existing employees and
salaries and costs associated with the hiring of new management and
administrative personnel.
 
    OPERATING INCOME.  Operating income increased 137.8% to $8.8 million or
11.4% of net sales in the six months ended June 30, 1997, from $3.7 million or
7.0% of net sales in the six months ended June 30, 1996. This increase resulted
primarily from the increase in net sales and gross profit margins.
 
    INTEREST EXPENSE.  Interest expense increased $0.2 million to $0.9 million
in the six months ended June 30, 1997 due to an increase in working capital
borrowing requirements. In the six months ended June 30, 1997, the average debt
balance was $15.9 million, with an average effective interest rate of 9.50%. In
the six months ended June 30, 1996, the average debt balance was $9.9 million
with an average effective interest rate of 9.25%.
 
                                       20
<PAGE>
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
 
    NET SALES.  Net sales increased 27.2% to $118.7 million in 1996 from $93.3
million in 1995. Substantially all of the increase in net sales was due to
greater unit volume shipments of both the BOSS and Beverly Hills Polo Club
sportswear lines. Net sales of BOSS sportswear increased 39.3% to $86.1 million
in 1996 from $61.8 million in 1995. The volume increase in BOSS sportswear was
primarily driven by strong growth in the tops segment, continued strength of the
jeans segment and, to a lesser extent, growth in the boys' and youth segments.
Net sales of BOSS tops and outerwear nearly doubled from $15.9 million in 1995
to $29.3 million in 1996, as a result of the Company's continued product
expansion and increased consumer acceptance and demand. The BOSS bottoms segment
also showed strong growth, as net sales increased 20.2% in 1996 to $44.7
million. Net sales of Beverly Hills Polo Club sportswear increased 101.4% to
$14.3 million during the same period primarily driven by strong growth in the
men's segment. This success was due in part to increased acceptance of the
product after its first full year of sales and the ongoing reconfiguration of
the Company's Beverly Hills Polo Club sales force to more effectively market to
specialty store customers. These increases in net sales were partially offset by
a decline in sales of the Company's men's private label collection and women's
Company-owned and private label collections as the Company continued to place
more emphasis on branded labels. The Company discontinued the men's private
label collection in 1996 due to unsatisfactory gross margins relative to BOSS
and Beverly Hills Polo Club sportswear. International sales were insignificant
in 1996.
 
    GROSS PROFIT.  Gross profit increased 38.5% to $34.2 million in 1996 from
$24.7 million in 1995. Gross profit as a percentage of net sales increased to
28.9% in 1996 from 26.5% in 1995. The increase in gross profit was primarily due
to the expansion of the BOSS tops product line as a percentage of total net
sales. The tops line had a higher gross margin due to reduced costs on imported
tops resulting from volume purchase discounts. Also, the continued shift of
production of denim bottoms from the United States to Mexico and accompanying
decrease in labor and overhead costs contributed to the improved gross margin.
 
    SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES.  SG&A expenses
increased 22.7% to $24.9 million in 1996 from $20.3 million in 1995. As a
percentage of net sales, SG&A expenses decreased to 21.1% in 1996 from 21.8% in
1995. This improvement reflects overall declines in SG&A expenses resulting from
cost containment efforts in certain expense areas and expense leverage
associated with the Company's growth. Selling expense increased $4.6 million to
$16.7 million over the same period, as a result of higher commissions to the
Company's salespersons and higher royalty payments to licensors on increased
sales of branded merchandise. Also, advertising expenditures increased to $2.5
million from $1.5 million as the Company initiated an advertising campaign to
promote the BOSS brand. Distribution and shipping expenses increased $0.3
million to $2.7 million due to higher unit shipments and overtime wages for
employees at the Company's distribution center. The Company opted to incur
additional overtime wages rather than adding personnel to process the increase
in unit shipments. General and administrative expenses increased $0.4 million to
$6.2 million during the same period primarily due to higher data processing
expenses.
 
    OPERATING INCOME.  Operating income increased 106.7% to $9.3 million or 7.8%
of net sales in 1996, from $4.5 million or 4.7% of net sales in 1995. This
increase primarily resulted from the increase in net sales and gross profit
margins as well as the receipt of approximately $0.7 million related to an
agreement with the Company's insurance carrier to reimburse it for legal fees
associated with litigation billed in prior years.
 
    INTEREST EXPENSE.  Interest expense increased to $1.4 million from $1.2
million in 1996 due to an increase in working capital borrowing requirements
which was partially offset by a reduction in borrowing costs. For 1996, the
average outstanding short-term debt balance was $9.8 million, with an average
effective interest rate of 9.25%. For 1995, the average balance was $8.5
million, with an average effective interest rate of 9.88%.
 
                                       21
<PAGE>
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
 
    NET SALES.  Net sales increased 9.4% to $93.3 million in 1995 from $85.3
million in 1994. Substantially all of this increase was due to greater unit
shipments of BOSS sportswear which was due to greater penetration of the
specialty store channel and initial shipments to a major department store chain.
Net sales of BOSS sportswear increased $6.0 million or 10.8% to $61.8 million in
1995 primarily due to the expansion of the tops product line. The overall
increase in net sales was partially offset by weaker sales of colored denim
shorts. Net sales of Beverly Hills Polo Club sportswear increased $3.3 million
or 86.8% to $7.1 million over the same period as it continued to grow from its
initial introduction by the Company in the first quarter of 1994. There were no
international sales in 1995 or 1994.
 
    GROSS PROFIT.  Gross profit increased 6.9% to $24.7 million in 1995 from
$23.1 million in 1994. However, gross profit as a percentage of net sales
decreased to 26.5% from 27.1% over the same period. The decrease in gross profit
as a percentage of net sales resulted from weaker sales of higher gross margin
colored denim shorts combined with stronger sales of the Company's lower gross
margin private label products.
 
    SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES.  SG&A expenses
increased 10.9% to $20.3 million in 1995 from $18.3 million in 1994. As a
percentage of net sales, SG&A expenses increased to 21.8% from 21.5% in 1994 as
the Company increased investment in organizational structure and personnel to
support growth and expanded advertising. Selling expenses increased $1.6 million
to $12.1 million during the same period primarily due to a $1.1 million increase
in advertising expenditures. Total advertising expenditures more than tripled to
$1.5 million as the Company significantly expanded its campaign to increase
awareness of the BOSS brand. Also, commission expenses to the Company's
salespersons and royalty payments to licensors rose as sales of BOSS and Beverly
Hills Polo Club sportswear continued to increase as a percentage of total net
sales. Distribution and shipping expenses increased $0.4 million to $2.4 million
over the same period as a result of increased unit shipments and overtime wages
for employees at the Company's distribution center. General and administrative
expenses were essentially unchanged from the $5.8 million experienced in 1994 as
the Company contained personnel costs.
 
    OPERATING INCOME.  Operating income decreased 4.3% to $4.5 million or 4.7%
of net sales in 1995, from $4.7 million or 5.6% of net sales in 1994. This
decrease primarily resulted from lower gross margins coupled with higher SG&A
expenses.
 
    INTEREST EXPENSE.  Interest expense increased minimally to $1.3 million in
1995 primarily due to an increase in average outstanding borrowings. For 1995,
the average outstanding short-term debt balance was $8.5 million, with an
average effective interest rate of 9.88%. For 1994, the average balance was $6.6
million, with an average effective interest rate of 9.72%.
 
    OTHER INCOME (EXPENSE).  There was no significant other income in 1995 as
compared to other income of $1.2 million in 1994. In 1994, the Company received
approximately $1.2 million as the final payment related to the settlement of a
license dispute with a third party.
 
    EXTRAORDINARY ITEM.  The Company recognized an extraordinary gain of $0.4
million in 1994 related to early extinguishment of senior subordinated debt due
a former partner. There was no comparable item in 1995.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    The Company has relied primarily on internally generated funds, trade credit
and asset-based borrowings to finance its operations and expansion. The
Company's capital requirements primarily result from working capital needed for
inventory and accounts receivable.
 
                                       22
<PAGE>
    OPERATING CASH FLOW
 
    Cash used by operations totaled $5.9 million for the six months ended June
30, 1997 due to a significant increase in accounts receivable and inventory
which resulted from higher sales of BOSS and Beverly Hills Polo Club sportswear.
This was partially offset by higher levels of accounts payable and improved
operating results. Cash used for investing activities totaled $0.6 million for
the six months ended June 30, 1997 and was used primarily for the purchase of
machinery for the Company's factories. Cash provided by financing activities
totaled $7.1 million for the six months ended June 30, 1997. The Company
borrowed $7.4 million under its credit facilities primarily to finance the
growth in accounts receivable and inventory and borrowed $4.4 million to fund
distributions to its stockholders for the payment of federal and state income
taxes.
 
    As of June 30, 1997, the Company had working capital of $19.4 million
compared to $16.3 million at December 31, 1996. The $3.1 million increase in
working capital primarily resulted from a $8.9 million increase in accounts
receivable and a $7.9 million increase in inventories resulting from higher
sales of BOSS and Beverly Hills Polo Club sportswear and higher levels of
finished goods. This was partially offset by a $1.1 million increase in accounts
payable, a $1.0 million increase in the overdraft directly related to the higher
inventory levels necessary to support anticipated sales growth in early 1997 and
a $11.8 million increase in outstanding borrowings under the Company's revolving
line of credit.
 
    Capital expenditures were $0.6 million for the six months ended June 30,
1997 and $0.7 million in both 1996 and 1995. The Company's capital expenditures
were comprised primarily of purchases of computer equipment and sewing machinery
for its domestic factories. The Company anticipates that capital expenditures
will be approximately $6.0 to $7.0 million in 1998, primarily related to the
construction of a new 150,000 square foot distribution center in Milford,
Delaware to be financed through a mortgage loan.
 
    As of June 30, 1997, the Company had outstanding borrowings under its
revolving line of credit and term loan facility of $18.9 million compared to
$7.2 million as of December 31, 1996. The higher borrowing level was necessary
to support the growth in accounts receivable and inventory experienced in the
first half of 1997.
 
    Because of the Company's treatment as an S corporation for federal and state
income tax purposes, the Company has provided funds to its stockholders for the
payment of income taxes on the earnings of the Company. Accordingly, the Company
made cash distributions to its stockholders in the amounts of $2.9 million, $3.2
million and $4.4 million in 1995, 1996 and thus far in 1997, respectively. Prior
to the Closing Date, the Company will declare the S Corporation Distribution. On
and after the S Terminiation Date, the Company will no longer be treated as an S
corporation. After completion of the Offering, the Company's immediate cash flow
needs will not reflect any dividend distributions to the Company's stockholders
for payment of income taxes on the earnings of the Company. However, the Company
will assume responsibility for payment of federal and state income taxes, which
will partially offset the Company's former cash commitment to provide its
stockholders with funds for the payment of income taxes.
 
    CREDIT FACILITIES
 
    The Company has an asset-based revolving line of credit with a lender that
allows it to borrow up to $30 million based on a percentage of eligible accounts
receivable and inventory. Outstanding borrowings at December 31, 1995 and 1996
were $7.2 million and $6.3 million, respectively. Borrowings under the revolving
line of credit bear interest at the lender's prime rate plus 1.0%. Also, the
Company has a term loan facility with the lender, which allows it to continually
borrow up to $1.0 million. Outstanding borrowings under the term loan were $0.3
million and $0.9 million at December 31, 1995 and 1996, respectively. The
Company will use a portion of the net proceeds of the Offering to repay the
amounts outstanding under these credit facilities. See "Use of Proceeds." The
Company intends to enter into a new credit facility after consummation of the
Offering, which will replace the existing revolving line of credit and term loan
facilities.
 
                                       23
<PAGE>
    In October 1997, the Company borrowed $11.3 million to finance the
acquisition of certain BOSS trademark rights. This obligation is evidenced by a
secured, limited recourse promissory note which matures on December 31, 2007
(the "Note"). The Note bears interest at 10.0% per annum, payable quarterly;
principal is payable in full upon maturity of the Note, which is collateralized
by the Trademark Rights. The Company has no recourse liability for payment of
the principal. See "Business--License and Other Rights Agreements."
 
    The Company extends credit to its customers. Accordingly, the Company may
have significant risk in collecting accounts receivable from its customers. The
Company has credit policies and procedures which it uses to minimize its
exposure to credit losses. As a result, the Company has experienced credit
losses of less than one-half of one percent of net sales in 1994, 1995 and 1996
and in the six months ended June 30, 1997.
 
    The Company believes that the net proceeds of the Offering, cash from
operations and its existing credit facilities will be sufficient to meet its
working capital requirements for the next 12 months.
 
PRO FORMA ADJUSTMENTS FOR INCOME TAXES
 
    Prior to the Reorganization, the Company's earnings were not subject to
federal, state and local income taxes. In connection with the Reorganization,
the Company's earnings will become subject to such taxes. In addition, as a
result of the Reorganization, the Company will record a net deferred tax asset
and a corresponding tax benefit in its statement of income in accordance with
the provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." If the Offering occurred on June 30, 1997, the
deferred tax asset and corresponding tax benefit would have been approximately
$1.3 million. The Company's pro forma effective tax rate, which excludes the
non-recurring tax benefit discussed above, for the years ended December 31,
1994, 1995 and 1996 and for the six months ended June 30, 1997 and June 30, 1996
was 41.0%. The effect of taxes is not discussed herein because the historic
taxation of the earnings of the Company is not meaningful with respect to
periods after the Reorganization.
 
SELECTED QUARTERLY RESULTS
 
    The Company's business is impacted by the general seasonal trends that are
characteristic of the apparel and retail industries. In the Company's segment of
the apparel industry, sales are generally higher in the first and third
quarters. However, the Company's strong growth in 1996 minimized this seasonal
effect. Historically, the Company has taken greater markdowns in the second and
fourth quarter. As the timing of the shipment of products may vary from year to
year, the results for any particular quarter may not be indicative of results
for the full year. The Company has not had significant overhead and other costs
generally associated with large seasonal variations.
 
    The following table sets forth certain unaudited quarterly financial
information for the periods shown:
<TABLE>
<CAPTION>
                                                                         QUARTER ENDED
                                        --------------------------------------------------------------------------------
<S>                                     <C>          <C>          <C>            <C>            <C>          <C>
                                         MARCH 31,    JUNE 30,    SEPTEMBER 30,  DECEMBER 31,    MARCH 31,    JUNE 30,
                                           1996         1996          1996           1996          1997         1997
                                        -----------  -----------  -------------  -------------  -----------  -----------
 
<CAPTION>
                                                                     (DOLLARS IN THOUSANDS)
<S>                                     <C>          <C>          <C>            <C>            <C>          <C>
Net sales.............................   $  25,902    $  25,997     $  34,481      $  32,275     $  39,312    $  38,398
Gross profit..........................       7,839        7,837        10,716          7,842        13,313       12,376
Gross profit margin...................        30.3%        30.2%         31.1%          24.3%         33.9%        32.2%
Operating income......................   $   2,089    $   1,567     $   3,924      $   1,745     $   4,854    $   3,968
Operating margin......................         8.1%         6.0%         11.4%           5.4%         12.3%        10.3%
</TABLE>
 
INFLATION
 
    The Company does not believe that the relatively moderate rates of inflation
experienced in the United States over the last three years have had a
significant effect on its net sales or profitability. Although higher rates of
inflation have been experienced in a number of foreign countries in which the
Company's products are manufactured, the Company does not believe that they have
had a material effect on the Company's net sales or profitability.
 
                                       24
<PAGE>
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
 
    In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"). SFAS 123 will begin to affect the Company in 1997
with the establishment of the 1997 Omnibus Stock Plan. See "Management-- 1997
Omnibus Stock Plan." The Company will adopt only the disclosure provisions of
SFAS 123 and account for stock-based compensation using the intrinsic value
method set forth in APB Opinion 25.
 
    In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS
128 provides a different method of calculating earnings per share than is
currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic
and diluted earnings per share. Basic earnings per share includes no dilution
and is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of an entity, similar to existing fully diluted earnings
per share. As required by the policies of the Securities and Exchange Commission
(the "Commission"), the Company has treated the shares being sold to fund the S
Corporation Distribution as outstanding prior to the Offering. SFAS 128 does not
have a provision requiring such treatment. The Commission is currently
evaluating its policies concerning this issue. Assuming shares issued to fund
the S Corporation Distribution continue to be treated as outstanding prior to
the Offering, the Company believes adopting SFAS 128 will not have a material
effect on its calculation of earnings per share. The Company will adopt the
provisions for computing earnings per share set forth in SFAS 128 in December
1997.
 
    Statement of Financial Accounting Standards No. 129, Disclosure of
Information about Capital Structure ("SFAS 129"), effective for periods ending
after December 15, 1997, establishes standards for disclosing information about
an entity's capital structure. SFAS 129 requires disclosure of the pertinent
rights and privileges of various securities outstanding (stock, options,
warrants, preferred stock, debt and participation rights) including dividend and
liquidation preferences, participant rights, call prices and dates, conversion
or exercise prices and redemption requirements. Adoption of SFAS 129 will have
no effect on the Company as it currently discloses the information specified.
 
    In June 1997, the Financial Accounting Standards Board issued two new
disclosure standards. The Company's results of operations and financial position
will be unaffected by implementation of these new standards.
 
    Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS 130"), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.
 
    Statement of Financial Accounting Standards No. 131, Disclosure about
Segments of a Business Enterprise ("SFAS 131"), establishes standards for the
way that public enterprises report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and services,
geographic areas and major customers. SFAS 131 defines operating segments as
components of an enterprise about which separate financial information is
available and that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance.
 
    Both SFAS 130 and SFAS 131 are effective for financial statements for
periods beginning after December 15, 1997 and require comparative information
for earlier years to be restated. Due to the recent issuance of these standards,
management has been unable to fully evaluate the impact, if any, they may have
on future financial statement disclosures.
 
                                       25
<PAGE>
                                    BUSINESS
 
INTRODUCTION
 
    I.C. Isaacs & Company, Inc. is a rapidly growing designer, manufacturer and
marketer of branded sportswear. Founded in 1913, the Company offers full lines
of sportswear for young men, women and boys under the BOSS brand in the United
States and Puerto Rico and sportswear for men and women under the Beverly Hills
Polo Club brand in the United States, Puerto Rico and Europe. Through a focused
strategy of providing fashionable, branded merchandise at value prices, the
Company has emerged as a significant fashion source for youthful consumers who
purchase sportswear and outerwear through specialty and department stores. The
Company also offers women's sportswear under various Company-owned brand names
as well as under third-party private labels. Net sales of the Company grew from
$85.3 million in 1994 to $118.7 million in 1996, and operating income grew from
$4.7 million in 1994 to $9.3 million in 1996, a compounded annual growth rate of
40.1%. In the first six months of 1997, net sales and operating income to
totaled $77.7 million, $8.8 million, respectively, as compared to $51.9 million
and $3.7 million in the first six months in 1996.
 
    The Company manufactures and markets sportswear under the BOSS brand at
specified price points in the United States and Puerto Rico and has positioned
the BOSS line to appeal to consumers who desire a fresh, urban, fashion-forward
look. Through creative and innovative marketing, the Company has created
powerful brand appeal for the BOSS line and has become an active influence in
young men's fashion. The BOSS collection has been expanded from an initial line
of denim products into a full array of sportswear consisting of jeans, tee
shirts, sweatshirts, shorts, knit and woven shirts and outerwear, many of which
are characterized by innovative design, creative graphics and bold uses of
color. The Company also markets a juniors' sportswear line under the BOSS brand
for young women, which includes a full selection of denim products and active
sportswear. Over the past three years, the Company's net sales of BOSS
sportswear increased at a compounded annual growth rate of 24.7%. In 1996, net
sales of BOSS sportswear accounted for 72.6% of the Company's net sales.
 
    As exclusive licensee for Beverly Hills Polo Club sportswear in the United
States, Puerto Rico and Europe, the Company targets men and women who desire
updated traditional sportswear at competitive prices. To reach a broader
demographic customer base, the Beverly Hills Polo Club collection combines
contemporary design details and innovative fabrics with classic American
sportswear styling. The Beverly Hills Polo Club collection consists primarily of
cotton clothing, including jeans, pants, shorts, knit and woven shirts and
outerwear targeting the active, image-conscious consumer. Since the line's
introduction in the spring of 1994, the Company's net sales of Beverly Hills
Polo Club sportswear increased at a compounded annual growth rate of 92.7%. In
1996, net sales of Beverly Hills Polo Club sportswear accounted for 12.0% of the
Company's net sales.
 
COMPETITIVE STRENGTHS
 
    In the late 1980's, management made a decision to change the Company's
marketing focus from a manufacturing-driven to a brand-driven strategy. As a
result, the Company believes it has developed distinct competitive strengths
which position it for continued success. The Company's key competitive strengths
include:
 
    EMPHASIS ON BRAND IDENTITY.  The Company believes that brand identity, as
well as the image or lifestyle it conveys, are important factors that influence
retail consumers' purchasing decisions. As a result of its branded product
focus, the Company believes that the BOSS and Beverly Hills Polo Club brands
have developed strong name recognition and consumer appeal. The Company has
consistently positioned the BOSS line to be a fashion-forward brand with an
urban attitude. The word "boss" conveys images of power and authority and is
commonly used by today's youth as an expression of excellence. Similarly, the
Company believes that the Beverly Hills Polo Club brand name, together with the
accompanying distinctive horse and rider logo, connotes a "classic American"
upscale image with which retail consumers easily
 
                                       26
<PAGE>
identify. The combination of these two brands enables the Company to offer a
broad continuum of products and designs well recognized by fashion conscious
consumers.
 
    COMBINATION OF FASHION AND VALUE.  The Company is able to provide consumers
with fashionable brand name sportswear at affordable prices. The BOSS and
Beverly Hills Polo Club product lines both consistently provide exciting,
fashion-forward products using fresh colors, striking graphic designs, unique
fabrics, unusual trimmings and elaborate embroidery. The Company offers a wide
array of traditional products (such as jeans, tee shirts, polo shirts and
sweatshirts) that are updated with creative design details and innovative
fabrics. The Company's manufacturing, sourcing and merchandising expertise
enables it to provide its customers with fashion, image-oriented products at
value prices. As a result, BOSS and Beverly Hills Polo Club products typically
sell at retail prices below those of many well known designer brands.
 
    CREATIVE AND INNOVATIVE MARKETING.  The Company has built the strong name
recognition and brand image of its products through a coordinated merchandising,
advertising and promotion strategy. Since the Company has not had the resources
to commit to a major mass media campaign, it has relied on innovation and
creativity to reach its target customers who are image conscious and influenced
by fashion, music and sports. In advertising its products, the Company uses
magazines such as VIBE, SOURCE, SLAM, GQ and POV, television shows and networks
including Turner Network Television (TNT), Black Entertainment Television (BET),
MTV: Music Television, Univision, Telemundo and various amateur and professional
sporting events. The Company is also a sponsor of the Chicago Bulls, New York
Knicks, New Jersey Nets, Atlanta Hawks, Detroit Pistons and Los Angeles Clippers
professional basketball teams and promotes the image of its products by
providing celebrities with its branded clothing and featuring its products in
television programs and movies. The Company influences the presentation of its
brands and products at the retail level by providing in-store signage, video
advertisements and most recently, the "Shop-in-Shop" concept.
 
    FLEXIBLE MANUFACTURING AND SOURCING.  The Company believes that its ability
to source products from its United States facilities and third party foreign and
domestic manufacturers provides it with significant manufacturing flexibility.
The Company owns and operates three manufacturing facilities in the United
States for the production of bottoms. In addition, the Company contracts for the
manufacture of its products through third party foreign and domestic
manufacturers. Currently, the Company utilizes approximately 50 factories in
more than 10 countries including China, Hong Kong, Korea, Mexico, the
Philippines, Taiwan, Thailand and the United States. The Company takes full
advantage of a rapid delivery capability by producing jeans in its own
manufacturing facilities and tee shirts at domestic contractors. In addition,
the Company gains a significant cost advantage by utilizing factories in Mexico
and Asia for the manufacture of innovative and labor intensive products that
typically cannot be produced competitively in the United States. This
combination of manufacturing and sourcing capabilities enhances the Company's
production flexibility and capacity while effectively enabling it to control the
timing, quality and pricing of its products.
 
GROWTH STRATEGY
 
    The Company's growth strategy includes continued capitalization on its
competitive strengths and the implementation of specific strategies for
continued expansion. The Company's principal growth strategies are as follows:
 
    BROADEN PRODUCT OFFERINGS.  The Company believes that significant additional
expansion opportunities exist in certain product categories under both the BOSS
and Beverly Hills Polo Club brands. As the BOSS brand has developed, the Company
has shifted its product mix from predominantly bottoms to a broader collection
of sportswear, driven by tops and outerwear. This evolution is consistent with
many sportswear companies, which generally sell several tops for each pair of
bottoms. Currently, the Company sells approximately the same number of units of
tops and bottoms but believes this ratio will increase to three to four tops for
each pair of bottoms sold. The continued evolution of the product mix provides
significant
 
                                       27
<PAGE>
growth opportunities for the Company's tops segment. The Company is growing its
BOSS line by adding new product categories, such as polo shirts and swimwear,
broadening its outerwear collection and expanding its boys', juniors' and youth
lines. Similarly, the Beverly Hills Polo Club brand includes a number of product
lines that are in the early stages of market penetration, such as outerwear. To
further develop the Beverly Hills Polo Club brand, the Company plans to
introduce men's dress shirts as part of its 1998 fall collection. Product
offerings within the Beverly Hills Polo Club women's line are also being
expanded, and the Company is reorganizing and increasing its women's sales
force.
 
    ENHANCE MARKETING PROGRAMS.  While the Company believes that its current
marketing strategy is one of its primary competitive strengths, it intends to
continue its efforts to increase net sales by enhancing consumer recognition of
its brand names and images through expanded marketing efforts. The BOSS brand is
currently advertised through a variety of media, including television and print,
while the Beverly Hills Polo Club brand is primarily advertised through print
media. As the Company continues to grow, it plans to use its increased financial
resources to further support and expand the brand exposure for BOSS and Beverly
Hills Polo Club through increased television and print advertising, and various
forms of outdoor advertising such as billboards and signage on buses and at bus
stops. To further differentiate its products at the retail level, the Company
also plans to expand its point-of-sale advertising. Specifically, the Company
intends to build upon its existing programs to provide signage and posters and
to expand its presence in the stores by providing additional permanently
identified free-standing fixtures and presentation services. The Company also
plans to enhance visual presentation of its products at the retail level through
the "Shop-in-Shop" concept. The Company believes an expanded "Shop-in-Shop"
program will further stimulate retailers to make longer term commitments to the
Company's products and will encourage each store to carry a broader array of
product lines each season.
 
    EXPAND CHANNELS OF DISTRIBUTION.  With increased demand for its sportswear,
the Company believes that it can continue to expand and penetrate certain
channels of distribution, primarily the department store channel. In recent
years, the Company has moved beyond the specialty stores and specialty store
chains with its BOSS label to begin significant distribution to department store
customers. As a result, J.C. Penney Company, Inc. was the Company's largest
customer in 1996. Under the BOSS brand, the Company is also selling to other
major department stores including The May Department Stores Company, Federated
Department Stores, Inc. and Dayton Hudson Corporation. Further penetration of
these accounts with the BOSS product line is a primary focus of the Company, and
the recently introduced "Shop-in-Shop" concept should help facilitate this
department store expansion. The Beverly Hills Polo Club brand has not penetrated
the department store channel to the same extent as the BOSS brand, and the
expanded distribution of Beverly Hills Polo Club products in department stores
is a primary growth focus of the Company. In addition, the Company will continue
to increase the number of products distributed to specialty stores and specialty
store chains. The Company already sells to over 4,000 specialty stores and
specialty store chains and believes that this broad cross-section of active
accounts distinguishes it from many of its competitors. Utilizing its 44 sales
representatives and in-house credit department, the Company plans to expand the
product categories that it sells to the specialty store channel of distribution
while maintaining its excellent credit risk experience.
 
    INCREASE EUROPEAN PRESENCE.  The Company believes it is well positioned to
capitalize on the appeal of its Beverly Hills Polo Club licensed brand name to
continue to expand its European product distribution. The classic American
sportswear look conveyed by the Beverly Hills Polo Club line is popular with
European youth, due in part to the proliferation of American entertainment,
including music, movies, television programs and professional sports. While the
Company has only recently entered the European market in the fourth quarter of
1996, it currently has distributors in Belgium, France, Greece, Luxembourg, the
Netherlands, Norway, Portugal and the United Kingdom. To meet the consumer
demand for its Beverly Hills Polo Club sportswear, the Company has been moving
to expand its network of wholesale distributors in Europe and is currently
negotiating agreements to add distribution in Austria, Germany, Italy, and
Switzerland. In addition, the Company has established three franchise stores in
Spain, including
 
                                       28
<PAGE>
a franchise store in Madrid. Discussions are currently underway for several
additional franchise stores in Spain and elsewhere in Europe.
 
PRODUCTS
 
    The Company's sportswear collections under the BOSS and Beverly Hills Polo
Club brands provide a broad range of product offerings for young men, women and
boys, including a variety of tops, bottoms and outerwear. While each brand
reflects a distinct image and style, both are targeted to consumers who are
seeking high quality, fashionable products at competitive prices. The Company
also manufactures and markets women's sportswear under its own "I.C. Isaacs,"
"Lord Isaacs" and "Pizzazz" brand names as well as under third-party private
labels. Consistent with its focus on branded products, the Company discontinued
its manufacture of men's private label apparel in the fourth quarter of 1996.
The Company may seek to acquire additional licenses or brand names as a
continuation of its branded-market strategy. The following table sets forth, for
the periods indicated, the Company's net sales categorized by brand and product
category:
<TABLE>
<CAPTION>
                                                                                                     SIX MONTHS ENDED
                                                                      YEAR ENDED DECEMBER 31,            JUNE 30,
                                                                  -------------------------------  --------------------
<S>                                                               <C>        <C>        <C>        <C>        <C>
                                                                    1994       1995       1996       1996       1997
                                                                  ---------  ---------  ---------  ---------  ---------
 
<CAPTION>
                                                                                     (IN THOUSANDS)
<S>                                                               <C>        <C>        <C>        <C>        <C>
MEN'S(1)
BOSS Bottoms....................................................  $  37,724  $  37,234  $  44,667  $  21,224  $  29,075
BOSS Tops.......................................................      6,709     15,883     29,284     11,268     19,447
BOSS Boys'......................................................      1,834      3,264      6,736      2,055      6,771
Men's BHPC......................................................      2,795      5,219     12,226      4,598     11,822
Men's Private Label.............................................      3,227      4,299        500        427         50
                                                                  ---------  ---------  ---------  ---------  ---------
    Men's total.................................................     52,289     65,898     93,414     39,572     67,165
                                                                  ---------  ---------  ---------  ---------  ---------
WOMEN'S(1)
BOSS Juniors'(2)................................................      9,528      5,423      5,413      3,464      1,954
Women's BHPC....................................................      1,047      1,833      2,043        774        819
Women's Other(3)................................................     22,433     20,116     17,786      8,089      7,772
                                                                  ---------  ---------  ---------  ---------  ---------
    Women's total...............................................     33,009     27,373     25,242     12,327     10,545
                                                                  ---------  ---------  ---------  ---------  ---------
    Total net sales.............................................  $  85,298  $  93,271  $ 118,655  $  51,899  $  77,710
                                                                  ---------  ---------  ---------  ---------  ---------
                                                                  ---------  ---------  ---------  ---------  ---------
</TABLE>
 
------------------------
 
(1) The net sales totals incorporate product returns allocated in proportion to
    gross sales.
 
(2) Results for the year ended December 31, 1994 include approximately $2.5
    million of net sales of tee shirts and sweatshirts with unisex styling that
    were discontinued after the Company obtained a license to manufacture and
    sell men's BOSS tops in the fourth quarter of 1994. As a result, these
    products were recategorized in men's BOSS tops in 1995 and thereafter.
 
(3) Includes Company-owned brands and third-party private labels.
 
    BOSS PRODUCTS
 
    The BOSS brand is a full sportswear line characterized by innovative
fabrication, creative graphics and bold uses of color. BOSS products appeal to
young men, young women and boys, who want a fresh, fashion-forward look with an
urban attitude at a competitive price. As the line has expanded and matured, the
demographics of BOSS customers have expanded beyond their urban base to include
fashion-conscious young consumers across the United States. Over the past three
years, the Company has placed increased emphasis on expansion of the top's
segment, and it anticipates that this segment will continue to be the fastest
growing category of products in the BOSS collection.
 
    Bottoms
 
    The Company's BOSS products began as a line of high-quality jeans and other
denim casual wear. The bottoms line currently consists of a wide variety of
denim jeans in a broad array of colors, designs and styles together with
corduroy and twill pants. Many of the BOSS jeans feature elements such as unique
 
                                       29
<PAGE>
pocket treatments, innovative trim and embroidered logos. The Company maintains
its own washing facilities, which allow it to create a variety of washes for its
denim products. The Company identified an underserved niche in the young men's
market for fashion jeans at moderate price points as compared with many designer
jeans, which retail for $60 and up per pair. The estimated retail price for the
Company's jeans is between $35 and $50 per pair. In the spring of 1997, the
Company expanded its product offerings by introducing a swimwear collection.
Estimated retail prices for swimwear range from $30 to $40.
 
    Tops and Outerwear
 
    The BOSS young men's line includes a variety of tops, tee shirts and
outerwear. The BOSS tops collection consists of a range of products including
cotton tee shirts, polo shirts, cotton pique shirts, novelty knit tops and
fleece sweatshirts. These products utilize unique combinations of textured
polyester fabrications, as well as a broad array of appliqued logos and
innovative graphics. The styling of many of the BOSS tops is influenced by
sports clothing and uniforms and conveys an energetic, youthful attitude. The
Company has expanded its outerwear line, which includes a variety of products
including nylon jackets and downfilled parkas. The estimated retail prices range
from $19 to $22 for tee shirts, $30 to $55 for tops and $50 to $100 for
outerwear products.
 
    Boys', Youth and Juniors' (Young Women)
 
    The Company complements its BOSS young men's line with BOSS boys' and youth
lines which are targeted to appeal to boys ages 4 to 7 and youth ages 8 to 16.
The BOSS boys' and youth product lines are substantially similar to the young
men's line and include jeans, tee shirts, tops, sweatshirts and outerwear.
Because the boys' market is more price conscious, some of the styles use less
expensive fabrication and design detail. The boys' and youth lines typically
sell at retail prices approximately 10% to 20% below the young men's line.
 
    The BOSS juniors' line is the female counterpart to the BOSS young men's
line and is targeted to appeal to fashion-conscious girls and women ages 16 to
25. The BOSS juniors' collection maintains its own identity as contemporary
sportswear with an urban attitude. The product line includes denim jeans, tee
shirts, skirts, tops and jackets. Many of these styles are characterized by
close-fitting designs utilizing textured fabrics and bold colors. The estimated
retail prices for the juniors' line range from $15 to $20 for tee shirts, $25 to
$50 for tops, $30 to $45 for jeans and $30 to $75 for outerwear.
 
    BEVERLY HILLS POLO CLUB PRODUCTS
 
    The Beverly Hills Polo Club sportswear products are positioned to be an
updated traditional sportswear brand. The products combine contemporary design
details and innovative fabric with classic American styling. With a broader
demographic appeal than the BOSS brand, Beverly Hills Polo Club products are
targeted to appeal to consumers 16 years and older. Today, the Beverly Hills
Polo Club name and accompanying horse and rider logo symbolize quality,
traditional sportswear at competitive prices.
 
    Tops and Outerwear
 
    The Company has merchandised the Beverly Hills Polo Club men's line to place
more emphasis on tops, including a full line of tee shirts, polo shirts, rugby
shirts, denim shirts and sweatshirts made primarily in cotton fabrics such as
pique, jersey and jersey fleece. While classic in styling, the tops line is
distinguished by innovative use of design, embroidery and fabric detail. The
collections also include more contemporary styles and a broader array of novelty
fabrics as well as product offerings such as woven shirts and outerwear,
including jackets and downfilled parkas. In 1998, the Company intends to
introduce a new line of men's dress shirts. Estimated retail prices range from
$19 to $22 for tee shirts, $30 to $60 for tops and $60 to $120 for outerwear.
 
                                       30
<PAGE>
    Bottoms
 
    While the primary focus of the Beverly Hills Polo Club men's line has been
on tops, the collection also includes a full line of bottoms consisting of denim
jeans, twill pants and corduroy casual pants. While somewhat more conservative
in styling compared to the BOSS line, the Beverly Hills Polo Club bottoms line
combines classic styling with unique trim, embroidery and pocket treatments.
Estimated retail prices for jeans and casual pants range from $40 to $55 per
pair.
 
    Women's
 
    The Company's Beverly Hills Polo Club women's sportswear line has a focus
similar to that of the men's sportswear line. It targets active, image-conscious
women 16 years and older and combines classic American styling with distinctive
design detail and fabrication. The product offerings include tee shirts, polo
shirts, denim shirts, jeans and casual pants. The collection also includes many
activewear items which utilize a variety of fabrics and graphic elements.
Estimated retail prices range from $18 to $20 for tee shirts, $30 to $60 for
tops and $40 to $55 for bottoms.
 
    COMPANY-OWNED AND THIRD-PARTY PRIVATE LABEL PRODUCTS
 
    The Company also produces sportswear for women under its own brands,
including "I.C. Isaacs," "Lord Isaacs" and "Pizzazz," as well as under
customers' private labels. These brands focus on pull-on elastic waist pants and
belted trousers in cotton, bleached and stonewashed denim, blended polyester and
rayon. These pants are designed to appeal to more mature women looking for basic
styling at value prices. The Company offers pants in a variety of fits including
missy, petite and large sizes. Color-coordinated tops and sweaters in cotton,
acrylic, blended polyester rayon and ramie cottons complete the mix. Estimated
retail prices range from $13 to $50 for bottoms and $20 to $60 for tops.
 
CUSTOMERS AND SALES
 
    The Company's BOSS products are sold throughout the United States and Puerto
Rico in over 1,500 specialty stores and specialty store chains, such as Fine's
and Miller's Outpost. The Company's newest level of distribution is to
department stores, and its single largest customer in 1996 was J.C. Penney
Company, Inc., which accounted for approximately 13.0% of net sales. Other
department store customers include Federated Department Stores, Inc., The May
Department Stores Company and Dayton Hudson Corporation. The Company's BOSS
products are sold and marketed under the direction of its national sales office
headquartered in New York. In addition to executive selling based in New York
and Dallas, the Company has 18 commissioned sales representatives who work out
of regional showrooms throughout the United States and Puerto Rico. The Company
considers its professional sales force to be one of its major assets and one of
the principal reasons why it has been successful in establishing relationships
with department stores and thousands of specialty stores and specialty retail
chains.
 
    The Company's Beverly Hills Polo Club sportswear is sold in the United
States, Puerto Rico and Europe. Although the Company is only in its third year
of distributing Beverly Hills Polo Club sportswear, the products are sold to
over 1,000 specialty stores and specialty store chains. The Company has begun to
sell Beverly Hills Polo Club products to department stores and believes that
there is significant potential for expanded department store sales. The
Company's Beverly Hills Polo Club products are sold and marketed under the
direction of its men's and women's national sales offices in New York. In
addition to executive selling based in New York and Dallas, the Company has a
sales force consisting of 14 sales representatives for its line of men's
sportswear and 11 sales representatives for its line of women's sportswear. To
more effectively market the Beverly Hills Polo Club women's collection, the
Company is currently in the process of reconfiguring and increasing its women's
sales force.
 
    The Company's Beverly Hills Polo Club sportswear has recently begun to be
sold throughout Europe through wholesale distributors, all of whom buy products
directly from the Company. Since January 1,
 
                                       31
<PAGE>
1997, the Company has entered into wholesale distribution arrangements with
distributors in Belgium, France, Greece, Luxembourg, the Netherlands, Norway,
Portugal and the United Kingdom and is negotiating agreements with distributors
in Austria, Germany, Italy and Switzerland. Under these arrangements, the
distributors purchase goods from the Company's Spanish subsidiary in U.S.
dollars under irrevocable letters of credit or by prepayment, thereby minimizing
the Company's credit risk. In addition, the Company has established three
franchise stores in Spain, including a showcase store in Madrid. Discussions are
currently underway for several additional franchise stores in Spain and
elsewhere in Europe.
 
    The Company-owned branded products and third-party private label products
are sold under the direction of the women's sales headquarters in New York and
by 15 commissioned sales representatives throughout the United States. The
products are distributed to department stores such as Dayton Hudson Corporation,
Mercantile Stores Company, Inc. and Sears Roebuck and Co.; mass merchandisers
and discounters such as Hills Department Store Company and Ames Department
Stores, Inc.; catalogs such as National Wholesale Co., Inc. and Arizona
Mail-Order Company, Inc. and approximately 1,500 specialty stores nationwide.
 
DESIGN AND MERCHANDISING
 
    The Company prides itself on its ability to identify and to respond to
fashion trends. The Company's designers and merchandisers travel around the
world in order to monitor emerging fashion trends and search for styling
inspiration and fabrics. These sources, together with new styling and graphics
developed by the Company's designers, serve as the primary creative influences
for the Company's product lines. In addition, designers and merchandisers
regularly meet with sales management to gain additional market insight and
further refine the products to be consistent with the needs of each of the
Company's markets. The Company's in-house design and product development is
carried out by merchandising departments in New York. Many of the Company's
products are developed using computer-aided design equipment, which allows
designers to view and easily modify images of a new design.
 
ADVERTISING AND MARKETING
 
    The Company aggressively communicates and reinforces the brand and image of
its BOSS and Beverly Hills Polo Club products through creative and innovative
advertising and marketing efforts. The Company's advertising and marketing
strategies are directed by its national sales offices and developed in
collaboration with its advertising agency. The Company's advertising strategy is
geared towards its youthful consumers whose lifestyles are influenced by music,
sports and fashion. The Company has been advertising the BOSS brand since 1992
and the Beverly Hills Polo Club brand since 1994, and its advertising campaigns
have evolved from trade magazines to a wide variety of media, including
billboards, television, fashion magazines and professional sports endorsements.
 
    Print advertisements for the BOSS brand appear regularly in VIBE, SOURCE and
SLAM magazines, while television advertisements appear on various networks
including Turner Network Television (TNT), Black Entertainment Television (BET),
MTV: Music Television, Univision and Telemundo. Advertisements for the BOSS
brand also appear on a variety of outdoor advertising media, including
billboards and bus stops. Print advertisements for the Beverly Hills Polo Club
brand are targeted to appeal to a broader demographic base and appear in
magazines such as GQ and POV. Television advertisements for the Beverly Hills
Polo Club brand are currently being developed. The Company's products can also
be seen on some of today's most visible sports and music celebrities, whose
attitude and image are captured by the BOSS and Beverly Hills Polo Club brands.
In addition, the Company is a sponsor of selected professional basketball teams,
including the Chicago Bulls, New York Knicks, New Jersey Nets, Atlanta Hawks,
Detroit Pistons and Los Angeles Clippers.
 
                                       32
<PAGE>
    The Company prides itself on its ability to efficiently utilize its
advertising budget. Although the Company has increased its expenditures on
advertising to approximately $2.5 million or 2.1% of net sales in 1996, this is
still a relatively modest amount as compared with some of its competitors. As
the Company continues to grow, it plans to use its increased financial resources
to further support and expand the brand exposure for BOSS and Beverly Hills Polo
Club.
 
    Recognizing that point of sale advertising is highly effective, the Company
provides an array of in-store signage, fixtures and product videos for both BOSS
and Beverly Hills Polo Club products. In addition, through the "Shop-in-Shop"
concept, the Company seeks to enhance brand recognition and to differentiate its
products from other branded apparel by creating an environment that is
consistent with the image of its products. For example, J.C. Penney Company,
Inc. currently has approximately 250 stores using the "Shop-in-Shop" concept to
showcase BOSS young men's products and approximately 75 stores using the
"Shop-in-Shop" concept to showcase Beverly Hills Polo Club men's merchandise.
The Company plans to expand the "Shop-in-Shop" program to build longer term
commitments with the retailer and enable the retailer to carry a broader array
of the product lines each season.
 
MANUFACTURING AND PRODUCT SOURCING
 
    GENERAL
 
    The Company believes that its flexible manufacturing and sourcing
capabilities enable it effectively to control the timing, quality and pricing of
products while providing customers with increased value. The Company uses its
own facilities as well as both domestic and foreign contractors for the
production of its products. During 1996, approximately 9% of the Company's
purchases of raw materials, labor and finished goods for its apparel were made
in Mexico; approximately 28% were made in Asia; approximately 23% were made at
third-party facilities in the United States; and the balance was made at the
Company's facilities in the United States. For the first half of 1997,
approximately 71% of the Company's manufacturing and sourcing was done by third
parties, all through arrangements with independent contractors. The Company
evaluates its contractors frequently and believes that there are a number of
manufacturers capable of producing products that meet the Company's quality
standards. The Company represents all or a significant portion of many of its
contractors' production and has the ability to terminate its arrangements with
any of its contractors at any time.
 
    UNITED STATES AND MEXICO
 
    The Company operates three manufacturing facilities in the United States and
currently utilizes seven contractors in the United States and three in Mexico.
The majority of the production in these facilities is for bottoms and tee
shirts. The Company produces approximately 50% of its bottoms (slacks, jeans,
shorts and skirts) in three Company-operated manufacturing facilities in
Mississippi, which combine to employ approximately 720 people. All three
facilities are efficient plants utilizing a level of automation that enables the
Company to competitively price its products and maintain the flexibility
necessary to meet its customers' changing demands.
 
    The Company safeguards its manufacturing capacity by utilizing contractors
in both the United States and Mexico to produce the same product lines. The
Company has established ongoing relationships with all of these contractors but
is not bound by written agreements to continue to do business with any of them.
The Company also uses a variety of contractors in both the United States and
Mexico as needed for value added functions such as embroidery, screen printing
and laundering. Seasonal fluctuations in production requirements are
accommodated by adjusting contracted quantities, while maintaining more
consistent levels of production in Company-operated facilities. All contractors
in the United States and Mexico are selected and managed by the Company's
manufacturing staff in Mississippi and Mexico.
 
    The Company uses a variety of raw materials, principally consisting of woven
fabrics including denim, cotton, polyrayons and various trim items. The Company
must make commitments for a significant portion
 
                                       33
<PAGE>
of its fabric purchases in advance of sales, although the Company's risk is
reduced because a substantial portion of the Company's products are sewn in
basic denim.
 
    ASIA
 
    In addition to the Company's domestic and Mexican pant and tee shirt
production facilities, the balance of the Company's sportswear products is
produced by approximately 50 different manufacturers in more than 10 countries.
Virtually all of the Company's products other than pants and tee shirts are
produced in Asia, but none of the Asian contractors engaged by the Company
accounted for more than 10% of the Company's total production in 1996. The
Company has well established relationships with many of its contractors although
it does not have written agreements with them. The Company retains independent
buying agents in various countries in Asia to assist in selecting and overseeing
independent manufacturers, sourcing fabric, trim and other materials, monitoring
quotas and performing certain quality control functions. The sourcing and
merchandising staffs in the Company's New York offices oversee all aspects of
Asian fabric and product development, apparel manufacturing, price negotiation
and quality control, as well as researching and developing new Asian sources of
supply.
 
    The Company seeks to achieve the most efficient means for the timely
delivery of its high quality products. With rare exceptions, the Company does
not purchase fabrics but instead negotiates a finished garment price from its
contractors. The contractor must then purchase the approved fabric as part of
the package. Orders are generally placed after the Company has received customer
orders, and delivery of finished goods to customers occurs generally 90 to 150
days after placement of the order. All of the Company's products manufactured
abroad are paid for in United States dollars. Accordingly, the Company does not
engage in any currency hedging transactions. During the last several years, the
volume of the Company's products produced in Asia has increased dramatically,
and this trend is likely to continue in the future.
 
WAREHOUSING AND DISTRIBUTION
 
    The Company has serviced its United States customers for the last 38 years
utilizing a Company-owned and operated distribution center in Milford, Delaware.
This primary facility has been expanded during that time, resulting in its
present size of approximately 70,000 square feet. Over the last few years, the
Company has leased additional space in the Milford area to accommodate increased
capacity requirements fueled by growth in sales. The Company is in the process
of establishing a computerized "Warehouse Management System" with real-time
internal tracking information and the ability to provide its customers with
electronically transmitted "Advance Shipping Notices." The accuracy of shipments
is increased by the ability to scan coded garments at the packing operation.
This process also provides for computerized routing and customer invoicing. The
vast majority of shipments are handled by UPS, common carriers or parcel post.
 
    The Company believes that its increased distribution requirements as a
result of rapid growth can be better met by consolidating its warehousing and
distribution functions into a new 150,000 square foot facility to be located in
Milford, Delaware. Consolidating all the receiving, stocking, packing and
shipping functions into one facility should result in improved management
control and less redundancy in supervision and operational functions. The
Company believes that its engineering plan for the new facility will provide the
capacity to accommodate substantial growth in the Company's domestic volume and
will reduce labor costs and improve response times. The Company believes the
construction of this facility should be completed in 1998 at an estimated cost
of between $6.0 million and $7.0 million to be financed through a mortgage loan.
In order to ensure against the possibility of interrupted flow of goods to its
customers, the Company plans to occupy the new facility in phases.
 
    The Company currently services its European customers through a contractual
arrangement with a distribution center in Barcelona, Spain, where the Company
maintains its European headquarters.
 
                                       34
<PAGE>
QUALITY CONTROL
 
    The Company's quality control program is designed to ensure that all of the
Company's products meet its high quality standards. The quality of piece goods
is monitored prior to garments being produced, and prototypes of each product
are inspected and approved before production runs are commenced.
 
    The goods produced by Company-operated facilities, as well as by United
States and Mexican contractors, undergo continual audits by quality personnel
during production. The quality control efforts of Company-operated facilities
are directed and coordinated by the Company's Quality Control Manager located in
Mississippi. Frequent visits are made by the Quality Control Manager and other
support staff, to all outside contractors to ensure compliance with the
Company's rigorous quality standards. Audits are also performed by quality
personnel at the Milford, Delaware distribution center on all categories of
incoming merchandise. The Company employs a full-time staff of 43 persons
dedicated to the quality control efforts of its United States and Mexican
production.
 
    All garments produced for the Company in Asia must be produced in accordance
with the Company's specifications. The Company's import quality control program
is designed to ensure that all of the Company's products meet its high quality
standards. The Company monitors the quality of fabrics prior to the production
of garments and inspects prototypes of products before production runs are
commenced. In many cases, the Company requires its agents or manufacturers to
submit fabric to an independent outside laboratory for testing prior to
production. The Company requires each agent to perform both in-line and final
quality control checks during and after production before the garments leave the
contractor. Personnel from the Company's New York office also visit Asia to
conduct inspections.
 
BACKLOG AND SEASONALITY
 
    The Company's business is impacted by the general seasonal trends that are
characteristic of the apparel and retail industries. In the Company's segment of
the apparel industry, sales are generally higher in the first and third
quarters. The Company generally receives orders for its products three to five
months prior to the time the products are delivered to stores. As a result of
the Company's recent growth, as of June 30, 1997, the Company had unfilled
orders of approximately $60 million, compared to approximately $43 million of
such orders as of June 30, 1996. The Company expects to fill substantially all
of these orders in 1997. The backlog of orders at any given time is affected by
a number of factors, including seasonality, scheduling of manufacturing and
shipment of products. All such orders are subject to cancellation for late
delivery. Accordingly, a comparison of backlogs of orders from period to period
is not necessarily meaningful and may not be indicative of eventual actual
shipments.
 
LICENSE AND OTHER RIGHTS AGREEMENTS
 
    BOSS TRADEMARK RIGHTS
 
    In 1990, the Company obtained a license from Brookhurst to use the
registered trademark BOSS in the United States and Puerto Rico in connection
with certain items of sportswear for men and women. Brookhurst and its
predecessors had utilized the BOSS trademark since the late nineteenth century.
Upon the closing of the Settlement, Brookhurst will (i) sell its BOSS trademark
rights worldwide (excluding Mexico), goodwill and registrations to the Company,
(ii) transfer its rights under certain agreements with third parties relating
thereto (the rights under (i) and (ii) above referred to collectively as the
"BOSS Trademark Rights") to the Company and (iii) cease to use the BOSS name
(except for a limited sell-off of certain uniforms and samples bearing the BOSS
mark). As part of the Settlement, the Company will sell its foreign BOSS
trademark rights and its rights under related agreements acquired from
Brookhurst (the "BOSS Foreign Trademark Rights") to a third party, in return for
the third party's assumption of a purchase money note of $11.0 million delivered
by the Company to Brookhurst (the "Brookhurst Note") pursuant to the purchase.
The Company will also enter into a foreign manufacturing rights agreement with
the third party (the "Foreign Rights Agreement") under which the Company will be
licensed to manufacture apparel in certain foreign countries for sale in the
United States using the BOSS name. The Company will retain its ownership of
domestic BOSS Trademark Rights ("Domestic BOSS Trademark Rights") subject to a
third party concurrent use agreement (the "Concurrent Use Agreement") governing
the Company's use of the Domestic BOSS Trademark Rights.
 
                                       35
<PAGE>
    Under the agreements entered into in connection with the Settlement, the
Company's BOSS rights will be expanded to allow broader product offerings and
additional Company control over styling, advertising and distribution. In
addition to the categories of apparel which the Company was permitted to
manufacture, distribute, market and sell under its previous license agreement
with Brookhurst, under the Settlement, the Company will have the right to
manufacture, distribute, market and sell, within specified wholesale price
points, the following categories of apparel under the BOSS brand in a specified
microgramma style (the "BOSS Logotype"): swimwear, jogging suits, polo shirts
and belts (as parts of garments). The Company may use the BOSS trademark in
forms other than the BOSS Logotype with prior approval of the other parties to
the agreements. The Company will not be permitted to use the BOSS brand on
footwear, formal and tailored clothing, leather clothing, body wear, underwear,
intimate apparel, loungewear, sleepwear and robes and clothing designed for the
primary purpose of engaging in skiing, tennis, motor sports, windsurfing and any
non-apparel items. The Concurrent Use Agreement sets forth specific parameters
governing the use by the Company of the BOSS trademark with respect to wholesale
pricing points, size, location, appearance, style and coloring of the trademark
on different product categories and advertising, and requires that the Company
use the phrase "BOSS by I.G. Design" in the BOSS logotype on all products.
 
    Under the Foreign Rights Agreement, the Company will have the right to
continue manufacturing BOSS apparel in foreign countries, including those in
which the Company is currently manufacturing BOSS apparel. The Foreign Rights
Agreement will terminate on December 31, 2001, but may be extended, at the
Company's option, through December 31, 2007.
 
    Under the Foreign Rights Agreement, the Company will pay annual royalties of
12 1/2% on the first $32.0 million of net sales attributable to apparel
manufactured in specified foreign countries ("Territory Net Sales") for each of
the first four years of the agreement; on the first $20.0 million in Territory
Net Sales for year five of the agreement; and on the first $16.0 million of
Territory Net Sales in years six through ten of the agreement. Such base
royalties will increase upon any prepayment of the Note. For the first four
years of the agreement, an aggregate additional royalty of 5% is payable
annually on Territory Net Sales from $84.0 million to approximately $105.3
million and an aggregate additional royalty of 4% is payable annually on
Territory Net Sales of $158.0 million and up. Additional royalties in years five
through ten of the agreement increase for certain corresponding sales levels.
The Company is required, subject to certain royalty payment caps set forth in
the agreement, to generate minimum annual Territory Net Sales of at least $32.0
million for each of the first four years of the agreement; $20.0 million for the
fifth year of the agreement and $16.0 million for each of years six through ten
of the agreement. The Company's Territory Net Sales for any given year under the
agreement must equal at least 95% of total net sales attributable to apparel
manufactured worldwide. To the extent that the Company does not achieve the
required Territory Net Sales, the Company will have the right, in order to avoid
termination of the agreement, to pay royalties as if such Territory Net Sales
had been achieved.
 
    The Foreign Rights Agreement may be terminated by the licensor upon the
occurrence of certain events, including, but not limited to (i) a material
breach by the Company after expiration of the applicable grace period, (ii)
certain events of bankruptcy, insolvency or assignment for the benefit of all
creditors relating to the Company or the appointment of a receiver or trustee
for the Company (a "Bankruptcy Event"), (iii) certain specified changes in the
control of the ownership of the Company, and (iv) certain uncured breaches by
the Company's foreign manufacturers of the terms of the agreements. In addition
to terminating the agreement, the licensor may require the Company to pay on an
accelerated basis all royalties due under certain sales assumptions through the
then current term of the agreement upon the occurrence of certain events
including, but not limited to (i) the failure of the Company to pay royalties
when due or to meet certain minimum sales requirements, (ii) the failure of the
Company to manufacture products in certain foreign countries, (iii) the sale of
the licensed products outside the United States, (iv) certain attempts by the
Company to create or establish trademark rights in the word BOSS in its own name
anywhere outside of the United States, (v) the willful and material breach of
the agreement and (vi) the occurrence of a Bankruptcy Event. The Company's
rights to use the BOSS name will terminate upon exercise of the Option (as
hereinafter defined) or upon earlier termination of any of the other agreements.
 
                                       36
<PAGE>
    A third party holds an option to purchase the Domestic BOSS Trademark Rights
from the Company (the "Option") for an amount equal to the principal of the Note
(i) at any time between the ninth anniversary of the Option's execution and
December 31, 2007, (ii) upon certain breaches of the Concurrent Use Agreement,
(iii) an event of default under the Note, or (iv) termination for any reason of
the Foreign Rights Agreement. See "Risk Factors--Dependence Upon Third Party
Rights and Licenses" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."
 
    BEVERLY HILLS POLO CLUB LICENSES
 
    Beverly Hills Polo Club Domestic Licenses
 
    Since 1993, the Company has had exclusive wholesale licensing agreements
(collectively, the "BHPC Agreements") with BHPC Marketing, Inc. for the
manufacture and promotion of certain men's and women's sportswear bearing the
registered trademark Beverly Hills Polo Club with an accompanying horse and
rider design (the "BHPC Trademark") for sale to moderate or better department
stores and specialty stores in the United States and its possessions, including
Puerto Rico. Under the BHPC Agreements, the Company may sell up to 25% of its
total volume for each of the men's and women's categories to warehouse clubs.
The licenses generally allow the Company to use the BHPC Trademark on sportswear
designed by or for the Company, subject to a quality approval process for
marketing and advertising materials, manufacturing premises and products bearing
the trademark. Under each of these licenses, as amended through April 1997, the
Company is required to make payments to the licensor in an amount equal to 5% of
the Company's net invoiced sales of licensed merchandise and to spend an amount
equal to 1% of net invoiced sales of such merchandise in advertising for the
licensed products. Under each license, the Company pays a monthly royalty equal
to the greater of 1/12th of the guaranteed minimum annual royalty or the actual
royalty earned by the licensor in the preceding month.
 
    Under the Beverly Hills Polo Club men's agreement (the "Men's Agreement")
the Company has been granted an exclusive license to use the BHPC Trademark in
connection with menswear fashions made of materials other than silk in the
following categories: denim sportswear, outerwear, knit, woven, and dress
shirts, knit and woven casual pants and shorts, sweaters, basic and fashion
fleece tops and bottoms, overalls and shortalls, knit tops (including tee-shirts
and polo shirts), swimwear and warm-ups. The Men's Agreement has an initial term
expiring December 31, 1998 and is renewable at the option of the Company,
provided the Company is not in breach thereof at the time renewal notice is
given, for two consecutive three-year periods commencing January 1, 1999,
through December 31, 2004.
 
    The Company's payment of royalties under the Men's Agreement is subject to a
guaranteed minimum annual royalty of $350,000 for the contract year ending
December 31, 1997 and $400,000 for the contract year ending December 31, 1998. A
guaranteed minimum annual royalty payment of $300,000, which was required for
the contract year ending December 31, 1996, was exceeded by the Company.
Notwithstanding its term, the Men's Agreement may be terminated by the licensor
in the event the Company fails to make net shipments of products for the
contract year ending December 31, 1997 in the amount of $7.0 million and for the
contract year ending December 31, 1998 in the amount of $8.0 million. Guaranteed
minimum annual royalties and guaranteed annual net shipments for each of the
renewal terms will be the greater of (i) 80% of the immediately preceding
contract year's actual royalties and net shipments, or (ii) the previous year's
guaranteed minimum royalty and guaranteed net shipments.
 
    The Beverly Hills Polo Club women's agreement (the "Women's Agreement")
grants the Company the right to use the BHPC Trademark in connection with
women's, missy, junior, petite and large size coordinated sportswear, sweaters,
sweater dresses, sweater suits, basic fleece tops and bottoms, basic tee-shirts,
basic polo shirts, warm ups in knit and woven fabrics and women's tennis and
golf related shorts sets, skort sets and pant sets in knit and woven fabrics.
The Women's Agreement has an initial term expiring December 31, 1998 and is
renewable at the option of the Company, provided the Company is not in breach
thereof at the time renewal notice is given, for two consecutive three-year
periods commencing January 1, 1999, through December 31, 2004.
 
    The Company's payment of royalties under the Women's Agreement is subject to
a guaranteed minimum annual royalty of $100,000 for the contract year ending
December 31, 1997 and $150,000 for the
 
                                       37
<PAGE>
contract year ending December 31, 1998. No guaranteed minimum annual royalty
payment was required for the contract year ending December 31, 1996.
Notwithstanding the term of the Women's Agreement, the women's license may be
terminated by the licensor in the event the Company fails to make net shipments
of products for the contract year ending December 31, 1997 in the amount of $2.0
million and for the contract year ending December 31, 1998 in the amount of $3.0
million. Such termination provision has been waived for the contract year ending
December 31, 1997. Guaranteed minimum annual royalties and guaranteed annual net
shipments for each of the renewal terms will be the greater of (i) 80% of the
immediately preceding contract year's actual royalties and net shipments, or
(ii) the previous year's guaranteed minimum royalty and guaranteed net
shipments.
 
    Each of the Men's and the Women's Agreements may be terminated by the
licensor upon the occurrence of certain events, including but not limited to the
following: (i) a breach by the Company of any obligation under the Agreement
that remains uncured within 30 days following the receipt of written notice of
such breach, (ii) the Company becomes insolvent, is the subject of a petition in
bankruptcy or otherwise enters into any composition with its creditors,
including reorganization, or (iii) the Company has committed three breaches of
the Agreement, in which case no right to cure the breach is afforded to the
Company.
 
    During the term of the Beverly Hills Polo Club domestic Men's and Women's
Agreements, the Company is prohibited from manufacturing or otherwise
distributing any merchandise under a brand name which closely resembles the BHPC
Trademark and from using on non-Beverly Hills Polo Club products any graphic,
style or design which closely resembles any items supplied to the Company by the
licensor. In addition, the rights of the Company under the Men's and Women's
Agreements are subject to the terms of a Settlement Agreement and Consent
Judgment between the licensor and Polo Fashions Inc., which imposes certain
restrictions on the licensor's manner of use and advertising of the BHPC
Trademark, including a prohibition on the use of the words "Polo" and "Polo
Club" alone on any item of apparel. The Company believes that the BHPC
Trademark, as licensed to the Company, complies with those restrictions.
 
    Beverly Hills Polo Club International Licenses
 
    On August 15, 1996, I.C. Isaacs Europe, S.L., a Spanish limited corporation
and wholly-owned subsidiary of the Company, entered into retail and wholesale
license agreements (collectively, the "International Agreements") for use of the
BHPC Trademark in Europe. The International Agreements, as amended through April
28, 1997, provide certain exclusive rights to use the BHPC Trademark in all
countries of Europe for an initial term of three years ending December 31, 1999,
renewable at the Company's option through two consecutive three-year extensions
ending December 31, 2004. The International Agreements are subject to
substantially the same terms and conditions as the BHPC Agreements described
above. The Company commenced its operations under the International Agreements
by January 1, 1997, as required by the terms thereof.
 
    The international retail agreement (the "Retail Agreement") grants the
Company the right to use the BHPC Trademark in connection with the manufacture
and sale through authorized Beverly Hills Polo Club retail stores and franchised
stores in Europe of the following categories of products: (i) men's pants, woven
shirts, knit shirts, jeans, shorts, sweaters, outerwear (excluding dress shirts
and suits); (ii) women's slacks, skirts, dresses, sweaters, outerwear, blouses
and jeans; and (iii) all other products licensed by the Beverly Hills Polo Club
licensor to other third parties (which must be purchased by the Company from the
authorized third-party licensees). The Retail Agreement excludes dress shirts
and suits. Under the Retail Agreement, the Company is required to pay the
licensor royalties equal to (i) 4% of the wholesale purchases by the Company of
Beverly Hills Polo Club products sold to Beverly Hills Polo Club retail stores,
and (ii) 2% of retail sales of licensed products by Beverly Hills Polo Club
retail stores. The Company is subject to guaranteed minimum annual royalty
payments of $60,000 in 1998 and $100,000 in 1999 and guaranteed net shipment
volumes of $1.0 million in 1998 and $2.0 million in 1999. There are no
guaranteed minimum annual royalty payments or guaranteed net shipment volumes
for the contract year ended December 31, 1997. The Retail Agreement is subject
to applicable franchising laws in Europe and, as a result, the licensor may
terminate the agreement if the Company is unable to obtain any necessary
 
                                       38
<PAGE>
governmental approval or to make any necessary governmental filings within four
months from the date of the first franchise agreement.
 
    The international wholesale agreement (the "Wholesale Agreement") grants the
Company the right to use the BHPC Trademark in connection with the manufacture
and sale at wholesale, for distribution to department stores and specialty
stores in Europe, of the following categories of products: (i) men's apparel
(excluding suits, ties, underwear, shoes and full length rainwear); and (ii)
women's apparel (excluding hosiery, intimate apparel, business suits, underwear,
accessories, shoes and full length rainwear). Under the Wholesale Agreement, the
Company is required to pay the licensor a royalty equal to 6% of net shipments
by the Company of licensed products directly to authorized Beverly Hills Polo
Club distributors or to retail stores. The Wholesale Agreement imposes
guaranteed minimum annual royalty payments of $120,000 in 1998 and $240,000 in
1999 and guaranteed net shipment volumes of $2.0 million in 1998 and $4.0
million in 1999. There are no guaranteed minimum annual royalty payments or
guaranteed net shipment volumes for the contract year ended December 31, 1997.
 
CREDIT CONTROL
 
    The Company manages its own credit and collection functions and has never
used a factoring service or outside credit insurance. The Company sells to
approximately 4,100 accounts throughout the United States and Puerto Rico. All
of the functions necessary to service this large volume of accounts are handled
by the Company's in-house credit department in Baltimore, Maryland. The Company
currently employs eight people in its credit department and believes that
managing its own credit gives it unique flexibility as to which customers the
Company can sell and how much business it can do with each. The Company believes
this provides a selling advantage over those competitors that are factored. In
each of the last three years, the Company's actual bad debt as a percentage of
net sales has been less than one-half of one percent.
 
COMPETITION
 
    The apparel industry is highly competitive and fragmented and is subject to
rapidly changing consumer demands and preferences. The Company believes that its
success depends in large part upon its ability to anticipate, gauge and respond
to changing consumer demands and fashion trends in a timely manner and upon the
continued appeal to consumers of the BOSS and Beverly Hills Polo Club brands.
The Company competes with numerous apparel brands and distributors (including
Calvin Klein, Fila, FUBU, Guess, JNCO, Tommy Hilfiger and Nautica). Many of the
Company's competitors have greater financial resources than the Company.
Although the level and nature of competition differ among its product
categories, the Company believes that it competes on the basis of its brand
image, quality of design and value pricing. In addition, under the Concurrent
Use Agreement and the BHPC Agreements, certain third parties have retained the
right to produce, distribute, advertise and sell, and to authorize others to
produce, distribute, advertise and sell certain garments that are similar to
some of the Company's products, including, in the case of the BOSS brand,
similar garments using the BOSS trademark at generally higher wholesale price
points. Any such production, distribution, advertisement or sale of such
garments by such licensor or another authorized party could have a material
adverse effect on the Company's financial condition or results of operations.
 
MANAGEMENT INFORMATION SYSTEMS
 
    The Company believes that advanced information processing is essential to
maintaining its competitive position. The Company is currently upgrading systems
that allow areas of the business to be more pro-active to customer requirements,
to improve internal communication flow, to increase process efficiency and to
support management decisions. The Company's systems provide, among other things,
comprehensive order processing, production, accounting and management
information for the marketing, selling, manufacturing, retailing and
distribution functions of the Company's business. The Company's software program
allows it to track, among other things, orders, manufacturing schedules,
inventory and sales of its products. The program includes centralized management
information systems, which provide the various operating departments with
financial, sales, inventory and distribution related information. Via electronic
 
                                       39
<PAGE>
data interchange, the Company is able to ship orders to certain customers within
24 to 72 hours from the time of order receipt.
 
EMPLOYEES
 
    The Company believes that its employees are one of its most valuable
resources. As of June 30, 1997, the Company had approximately 900 full-time
employees. The Company is not a party to any labor agreements, and none of its
employees is represented by a labor union. The Company considers its
relationship with its employees to be good and has not experienced any
significant interruption of its operations due to labor disputes. See "Risk
Factors--Dependence on Unaffiliated Manufacturers."
 
PROPERTIES
 
    Certain information concerning the Company's principal facilities is set
forth below:
 
<TABLE>
<CAPTION>
                                            LEASED OR                                              APPROXIMATE AREA
LOCATION                                      OWNED                        USE                      IN SQUARE FEET
-----------------------------------------  -----------  -----------------------------------------  ----------------
<S>                                        <C>          <C>                                        <C>
Baltimore, MD............................       Owned   Administrative Headquarters and Office            40,000
                                                        Facilities
New York, NY.............................      Leased   Sales, Merchandising, Marketing and                7,449
                                                        Sourcing Headquarters
New York, NY.............................      Leased   Sales, Marketing and Sourcing                      4,300
                                                        Headquarters
Barcelona, Spain.........................      Leased   European Headquarters                              2,000
Milford, DE..............................       Owned   Distribution Center                               70,000
Newton, MS...............................      Leased   Manufacturing Plant                              101,000
Carthage, MS.............................      Leased   Manufacturing Plant                              110,000
Raleigh, MS..............................      Leased   Manufacturing Plant                               90,000
</TABLE>
 
    The Company also has regional sales offices, all of which are leased, in the
following cities: Atlanta, Georgia; Dallas, Texas; Miami, Florida; Seattle,
Washington; Los Angeles, California; Philadelphia, Pennsylvania; Boston,
Massachusetts; Minneapolis, Minnesota; Charlotte, North Carolina; and Santurce,
Puerto Rico. The Company believes that its existing facilities are well
maintained and in good operating condition. The Company also believes that its
increased distribution requirements can be better met by consolidating its
warehousing and distribution functions into a new 150,000 square foot facility
to be located in Milford, Delaware. See Note 5 of Notes to Consolidated
Financial Statements for further information regarding current lease
obligations.
 
ENVIRONMENTAL MATTERS
 
    The Company is subject to federal, state and local laws, regulations and
ordinances that (i) govern activities or operations that may have adverse
environmental effects (such as emissions to air, discharges to water, and the
generation, handling, storage and disposal of solid and hazardous wastes) or
(ii) impose liability for the costs of clean up or other remediation of
contaminated property, including damages from spills, disposals or other
releases of hazardous substances or wastes, in certain circumstances without
regard to fault. Certain of the Company's operations routinely involve the
handling of chemicals and wastes, some of which are or may become regulated as
hazardous substances. The Company has not incurred, and does not expect to
incur, any significant expenditures or liabilities for environmental matters. As
a result, the Company believes that its environmental obligations will not have
a material adverse effect on its financial condition or results of operations.
 
LITIGATION
 
    The Company is a party to various claims, complaints and other legal actions
that have arisen in the ordinary course of business from time to time. The
Company believes that the outcome of such pending legal proceedings, in the
aggregate, will not have a material adverse effect on the Company's financial
condition or results of operations.
 
                                       40
<PAGE>
                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
    The following table sets forth certain information concerning the directors
and executive officers of the Company:
 
<TABLE>
<CAPTION>
NAME                                                       AGE                            POSITION
-----------------------------------------------------      ---      -----------------------------------------------------
<S>                                                    <C>          <C>
 
Robert J. Arnot......................................          49   Chairman of the Board, Co-Chief Executive Officer and
                                                                    Director
 
Gerald W. Lear.......................................          54   President, Co-Chief Executive Officer and Director
 
Gary B. Brashers.....................................          49   Vice President--Manufacturing, Chief Operating
                                                                    Officer and Director
 
Eugene C. Wielepski..................................          51   Vice President--Finance, Chief Financial Officer and
                                                                    Director
 
Ira J. Hechler.......................................          79   Director
 
Jon Hechler..........................................          44   Director
 
Ronald S. Schmidt....................................          53   Director
 
Thomas P. Ormandy....................................          46   Vice President--Sales
</TABLE>
 
    The Company has two Chief Executive Officers, Robert J. Arnot and Gerald W.
Lear. Mr. Arnot and Mr. Lear share decision-making responsibility with respect
to business strategy, product pricing, budgeting, financial management,
institutional relationships, licensing decisions, European operations and legal
issues.
 
    ROBERT J. ARNOT has been a Director of the Company since 1984, Vice
President of Planning and Corporate Development from 1989 to 1991, Chairman of
the Board of Directors since 1991, and Co-Chief Executive Officer since 1996. He
has been employed by the Company since 1989. In addition to sharing overall
decision-making responsibility as described above, Mr. Arnot has lead
responsibility for the following operating areas, which report directly to him
in New York: BOSS and Beverly Hills Polo Club design and merchandising, Asian
sourcing and manufacturing, BOSS and Beverly Hills Polo Club sales management
and advertising.
 
    GERALD W. LEAR has been a Director of the Company since 1980 and President
and Chief Executive Officer since 1987. He was Vice President from 1975 to 1984
and Executive Vice President from 1984 to 1986. He has been employed by the
Company since 1962. In addition to sharing overall decision-making
responsibility as described above, Mr. Lear has lead responsibility for the
following operating areas, which report directly to him in Baltimore: United
States and Mexican production of bottoms, United States tee shirt production,
I.C. Isaacs bottoms merchandising, bottoms design department, cost accounting,
shipping and warehousing and corporate administration (which includes management
information systems, credit, accounting, customer service and personnel).
 
    GARY B. BRASHERS has been a Director and Chief Operating Officer since 1988
and Vice President-- Manufacturing since 1985. Prior to that he held positions
with the Company in quality control and manufacturing. He has been employed by
the Company since 1978. Prior to joining the Company, he held various
manufacturing management positions in the apparel industry since 1969.
 
                                       41
<PAGE>
    EUGENE C. WIELEPSKI has been a Director, Vice President--Finance and Chief
Financial Officer of the Company since 1991. He has held the positions of
Secretary and Treasurer since 1976. From 1976 to 1990 he was Controller. He is a
Certified Public Accountant and has been employed by the Company since 1973.
 
    IRA J. HECHLER has been a Director of the Company since 1984. He is a
private investor who is also a member of the Board of Directors of American
Banknote Corporation and Concord Camera Corporation. He is Vice Chairman of the
Board of Directors of A.R.T./New York and a member of the Board of Trustees and
Treasurer of the Nassau County Museum of Art.
 
    JON HECHLER has been a Director of the Company since 1984. He has been
employed by Ira J. Hechler and Associates, an investment company, since 1980. He
also serves as President of T. Eliot, Inc., a manufacturer of bathroom
equipment. He is the son of Ira J. Hechler.
 
    RONALD S. SCHMIDT has been a Director of the Company since 1990. He is
President and Chief Executive Officer of I.B. Diffusion, a manufacturer of
ladies' apparel.
 
    THOMAS P. ORMANDY has been Vice President--Sales of the Company since 1986.
Previously, he was a salesman with Thompson and Company, an apparel
manufacturer, since 1975. He is responsible for the sales and marketing of the
BOSS men's, boys' and juniors' lines as well as the Beverly Hills Polo Club
men's line.
 
BOARD OF DIRECTORS
 
    The Company's Board of Directors is currently comprised of seven members.
There are currently two vacancies, and following the consummation of the
Offering, the Company intends to appoint two additional directors who will be
neither officers nor employees of the Company or its affiliates.
 
    The Company's Board of Directors is divided into three classes of three
members each. Directors of each class will be elected at the annual meeting of
stockholders held in the year in which the term for such class expires and will
serve for three years thereafter. The first class, whose term will expire at the
first annual meeting after the Offering, currently consists of Messrs. Arnot,
Lear and Wielepski; the second class, whose term will expire at the second
annual meeting after the Offering, currently consists of Messrs. Ira J. Hechler,
Jon Hechler and Gary B. Brashers; the third class, whose term will expire at the
third annual meeting after the Offering, currently consists of Mr. Ronald S.
Schmidt. The vacancies in Class III will be filled when the Company appoints two
additional directors after the Offering. For further information on the effect
of the classified Board of Directors, see "Description of Capital Stock--Certain
Certificate of Incorporation, By-law and Statutory Provisions Affecting
Stockholders."
 
    Pursuant to the Restated Shareholders' Agreement, all of the existing
stockholders of the Company have agreed to vote their shares of Common Stock in
elections to fill Class I and Class II of the Board of Directors in favor of the
nominees of the Principal Stockholders (as defined). See "Certain Transactions--
Restated Shareholders' Agreement."
 
    The Company has established a Compensation Committee consisting of Messrs.
Ira J. Hechler, Jon Hechler and Ronald S. Schmidt. The Compensation Committee is
responsible for reviewing and approving all compensation arrangements with
officers of the Company and will also be responsible for administering the 1997
Omnibus Stock Plan. See "--1997 Omnibus Stock Plan."
 
    Within 90 days following the consummation of the Offering, the Board of
Directors will establish an Audit Committee. The Audit Committee will be
responsible for recommending to the Board of Directors the engagement of the
independent auditors of the Company and reviewing with the independent auditors
the scope and results of the audits, the internal accounting controls of the
Company, audit practices and the professional services furnished by the
independent auditors.
 
    The General Corporation Law of the State of Delaware (the "Delaware
Corporation Law") provides that a company may indemnify its directors and
officers as to certain liabilities. The Company's Restated
 
                                       42
<PAGE>
Certificate and Restated By-laws provide for the indemnification of the
Company's directors and officers to the fullest extent permitted by law, and the
Company intends to enter into separate indemnification agreements with each of
its directors and officers to effectuate these provisions and to purchase
directors' and officers' liability insurance. The effect of such provisions is
to indemnify, to the fullest extent permitted by law, the directors and officers
of the Company against all costs, expenses and liabilities incurred by them in
connection with any action, suit or proceeding which they are involved by reason
of their affiliation with the Company. See "Description of Capital
Stock--Certain Certificate of Incorporation, Bylaw and Statutory Provisions
Affecting Stockholders" and "--Director and Officer Indemnification."
 
COMPENSATION OF DIRECTORS
 
    Directors who are employees of the Company receive no compensation for
serving on the Board of Directors. Directors who are not employees of the
Company will receive an annual retainer fee of $10,000 for their services and
attendance fees of $750 per Board or committee meeting attended. All directors
are reimbursed for expenses incurred in connection with attendance at Board or
committee meetings. In addition, members of the Board of Directors will be
eligible to participate in the Company's 1997 Omnibus Stock Plan. See "--1997
Omnibus Stock Plan."
 
EXECUTIVE COMPENSATION
 
    The following table sets forth the compensation paid or awarded to, or
earned by, the Co-Chief Executive Officers and the four most highly compensated
officers other than the Co-Chief Executive Officers (the "Named Executive
Officers") for the year ended December 31, 1996.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                                        ANNUAL COMPENSATION(1)(2)
                                                                                     --------------------------------
 
<S>                                                                                  <C>        <C>         <C>
NAME AND PRINCIPAL POSITION                                                            YEAR       SALARY      BONUS
-----------------------------------------------------------------------------------  ---------  ----------  ---------
 
Robert J. Arnot....................................................................       1996  $  275,676  $  50,000
  Chairman of the Board and
  Co-Chief Executive Officer
 
Gerald W. Lear.....................................................................       1996     300,220     50,000
  President and
  Co-Chief Executive Officer
 
Gary B. Brashers...................................................................       1996     200,220     25,000
  Vice President--Manufacturing and
  Chief Operating Officer
 
Eugene C. Wielepski................................................................       1996     160,220     20,000
  Vice President--Finance and
  Chief Financial Officer
 
Thomas P. Ormandy..................................................................       1996     240,000    110,000
  Vice President--Sales
 
Marc Baff..........................................................................       1996     107,620         --
  Vice President--Sales
</TABLE>
 
------------------------
 
(1) In their capacity as stockholders of the Company, the officers listed above
    were reimbursed during 1996 for payment of taxes on income of the Company
    that was passed through to the stockholders. See "Dividend Policy."
 
(2) Perquisites did not exceed the lesser of $50,000 or 10% of the total salary
    and bonus for any of the Named Executive Officers.
 
                                       43
<PAGE>
EMPLOYMENT AGREEMENTS
 
    The Company has entered into individual employment agreements (the
"Executive Employment Agreements") with each of Messrs. Arnot, Lear, Brashers,
Wielepski and Ormandy (collectively, the "Executives"). The initial term of the
Executive Employment Agreements began on May 15, 1997 (the "Effective Date") and
will terminate on the third anniversary of the Effective Date in the case of
Messrs. Arnot and Lear and on the second anniversary of the Effective Date in
the case of Messrs. Brashers, Wielepski and Ormandy. The Executive Employment
Agreements will automatically extend after the initial term for successive
one-year terms, unless notice not to extend is given by either party at least 60
days prior to the end of the then current term. The Executive Employment
Agreements provide for an annual base salary of $400,000, $400,000, $240,000,
$200,000, and $300,000 plus up to 20% thereof as bonus, respectively, which may
be increased based on periodic reviews by the Compensation Committee. In
addition, the Executive Employment Agreements provide that the Executives are
entitled to participate in any bonus and stock option plans, programs,
arrangements and practices sponsored by the Company as may be established from
time to time by the Board of Directors of the Company for the benefit of such
executive employees, in accordance with the terms of such plans. Each Executive
is also entitled to certain fringe benefits, including Company-paid health and
life insurance. If any of the Executives is terminated without cause (as such
term is defined in the Executive Employment Agreements), then such Executive
will receive as severance his then current base salary for the remainder of his
term of employment. The Executive will also continue to participate in
Company-sponsored health, life insurance and other fringe benefit plans and
programs during the severance period. The Executive Employment Agreements also
include certain noncompetition, nonsolicitation and confidentiality provisions.
 
1997 OMNIBUS STOCK PLAN
 
    On May 15, 1997, the Board of Directors of the Company and the Company's
stockholders adopted the 1997 Omnibus Stock Plan (the "Plan"). The purpose of
the Plan is to promote the long-term growth and profitability of the Company by
providing key people with incentives to improve stockholder value and contribute
to the growth and financial success of the Company, and by enabling the Company
to attract, retain and reward the best-available persons for positions of
substantial responsibility. The maximum number of shares of Common Stock that
may be issued with respect to awards granted under the Plan is 500,000. The Plan
is administered by the Compensation Committee of the Board of Directors.
Participation in the Plan will be open to all employees, officers, directors and
consultants of the Company or any of its affiliates, as may be selected by the
Compensation Committee from time to time. The Plan allows for stock options,
stock appreciation rights, stock awards, phantom stock awards and performance
awards to be granted. The Compensation Committee will determine the prices,
vesting schedules, expiration dates and other material conditions upon which
such awards may be exercised.
 
DEFINED BENEFIT PENSION PLAN
 
    The Company maintains a defined benefit pension plan (the "Pension Plan")
for its employees. The normal retirement benefit, payable at age 65, is 20% of
base compensation up to $10,000 plus 39.5% of base compensation over $10,000,
prorated for service less than 30 years. A reduced benefit is also payable on
early retirement, after age 55 and after 15 years of service. The Pension Plan
also provides disability retirement and death benefits. The Company pays the
full cost of the benefits under the Pension Plan through its contributions to a
trust. The Company's cash contributions to the Pension Plan during the year
ended December 31, 1996 aggregated $0.6 million.
 
                                       44
<PAGE>
    The Pension Plan Table below provides the estimated annual benefits payable
under the I.C. Isaacs Pension Plan upon retirement in specified compensation and
years of service classifications.
 
                               PENSION PLAN TABLE
 
<TABLE>
<CAPTION>
                                                                                YEARS OF SERVICE
                                                              -----------------------------------------------------
RENUMERATION
-------------
<C>            <S>                                            <C>        <C>        <C>        <C>        <C>
                                                                 15         20         25         30         35
                                                              ---------  ---------  ---------  ---------  ---------
 $   100,000   .............................................  $  10,875  $  14,500  $  18,126  $  21,751  $  21,751
     125,000   .............................................     10,875     14,500     18,126     21,751     21,751
     150,000   .............................................     10,875     14,500     18,126     21,751     21,751
     175,000   .............................................     10,875     14,500     18,126     21,751     21,751
     200,000   .............................................     10,875     14,500     18,126     21,751     21,751
     225,000   .............................................     10,875     14,500     18,126     21,751     21,751
     250,000   .............................................     10,875     14,500     18,126     21,751     21,751
     300,000   .............................................     10,875     14,500     18,126     21,751     21,751
     400,000   .............................................     10,875     14,500     18,126     21,751     21,751
     450,000   .............................................     10,875     14,500     18,126     21,751     21,751
     500,000   .............................................     10,875     14,500     18,126     21,751     21,751
</TABLE>
 
    The compensation considered in determining benefits under the plan (as
provided in the column titled "Remuneration") is the annual average compensation
for the five consecutive calendar years producing the highest average. The
compensation considered is limited to $75,000. All amounts of salary, bonus and
other compensation as reported in the Summary Compensation Table, up to $75,000,
are included in compensation considered under the plan. The amounts of benefit
provided in the Pension Plan Table are the amounts of benefit payable per year
in equal monthly installments for the life expectancy of the participants (i.e.,
straight life annuity amounts). The plan is integrated with Social Security, and
its benefit formula is as follows: (i) 0.6667% of compensation, multiplied by
years of service up to 30 years; plus (ii) 0.65% of compensation in excess of
$10,000 multipled by years of service up to 30 years.
 
    The estimated credited years of service for each of the Named Executive
Officers are as follows, estimated as of January 1, 1997:
 
<TABLE>
<CAPTION>
                                                                              ESTIMATED CREDITED
NAME                                                                           YEARS OF SERVICE
--------------------------------------------------------------------------  -----------------------
<S>                                                                         <C>
Robert J. Arnot...........................................................                 5
Gerald W. Lear............................................................                34
Gary B. Brashers..........................................................                18
Eugene C. Wielepski.......................................................                23
Thomas P. Ormandy.........................................................                10
Marc Baff.................................................................                19
</TABLE>
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    The Company did not have a Compensation Committee during 1996, but each of
Messrs. Arnot and Lear (each of whom also served as an executive officer of the
Company during 1996) participated in deliberations concerning executive
compensation. The Executive Employment Agreements were approved by the Company's
current Compensation Committee.
 
KEY MAN INSURANCE
 
    The following individuals are key employees of the Company, and their
contribution to the Company has been and will be a significant factor in the
Company's future success: Robert J. Arnot, Gerald W. Lear, Gary B. Brashers and
Eugene C. Wielepski. The loss of the services of one or more of these executive
 
                                       45
<PAGE>
officers for an extended period of time could have a material adverse effect on
the Company's financial condition or results of operations. The Company
maintains and is the beneficiary of life insurance policies in the amount of
$1.0 million on the lives of each of Messrs. Arnot, Lear and Brashers and in the
amount of $0.5 million on the life of Mr. Wielepski.
 
                              CERTAIN TRANSACTIONS
 
RESTATED SHAREHOLDERS' AGREEMENT
 
    The Company's Shareholders' Agreement dated December 20, 1984, as amended,
has been amended and restated, effective as of the time of consummation of the
Offering. Pursuant to the Restated Shareholders' Agreement, Messrs. Robert J.
Arnot, Gerald W. Lear, Ira J. Hechler and Jon Hechler are designated as
Principal Shareholders and the other stockholders of the Company immediately
prior to consummation of the Offering are designated as Non-Principal
Shareholders. The Principal Shareholders and the Non-Principal Shareholders have
agreed to vote their shares of Common Stock, in elections to fill Class I and
Class II of the Board of Directors, to elect nominees of the Principal
Shareholders. The Restated Shareholders' Agreement provides that each of the
Principal Shareholders has granted to each of the other Principal Shareholders
and to the Company rights of first refusal with respect to the sale of any
shares of the Company's outstanding Common Stock. The Restated Shareholders'
Agreement provides that each of the Non-Principal Shareholders holding, at the
time of the contemplated transfer, in excess of 0.5% of the outstanding Common
Stock of the Corporation has granted to (i) each of the Principal Shareholders,
(ii) each Non-Principal Shareholder and (iii) the Company, rights of first
refusal with respect to the sale of any shares of the Company's outstanding
Common Stock. The Restated Shareholders' Agreement also provides that in the
event that any two of (i) Robert J. Arnot, (ii) Gerald W. Lear and (iii) Ira J.
Hechler and Jon Hechler (a "Majority") agree to enter into a transaction with a
third party for the tender of shares (including, without limitation, in a change
of control transaction), the rights of first refusal set forth above shall not
apply and the Majority and/or the Company may require the other Principal
Shareholders and Non-Principal Shareholders to participate in such transaction
on the same terms and conditions applicable to the Majority.
 
ACQUISITION OF LIMITED PARTNERSHIP INTEREST
 
    Prior to the Closing Date, the Company's wholly-owned subsidiary, Isaacs
Design, Inc., will acquire the outstanding 1% limited partnership interest in
the Partnership from Ira J. Hechler, a director and stockholder of the Company,
in exchange for $280,000 in cash. See "Company Organization."
 
                                       46
<PAGE>
                             PRINCIPAL STOCKHOLDERS
 
    The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of September 30, 1997, and
as adjusted to reflect the sale of the Common Stock being offered hereby
(assuming no exercise of the Underwriters' over-allotment option) by (i) each
person (or group of affiliated persons) who is known by the Company to own
beneficially more than 5% of the outstanding Common Stock, (ii) each of the
Company's directors, (iii) each of the Named Executive Officers and (iv) all
directors and executive officers of the Company as a group:
 
<TABLE>
<CAPTION>
                                                                       BENEFICIAL OWNERSHIP OF   BENEFICIAL OWNERSHIP
                                                                        COMMON STOCK PRIOR TO       OF COMMON STOCK
                                                                            THE OFFERING          AFTER THE OFFERING
                                                                       -----------------------  -----------------------
NAME OF BENEFICIAL OWNERS (1)                                            NUMBER      PERCENT      NUMBER      PERCENT
---------------------------------------------------------------------  ----------  -----------  ----------  -----------
<S>                                                                    <C>         <C>          <C>         <C>
Robert J. Arnot......................................................     671,688       11.19%     671,688        6.85%
Gerald W. Lear.......................................................     671,688       11.19      671,688        6.85
Gary B. Brashers.....................................................     432,355        7.21      432,355        4.41
Eugene C. Wielepski..................................................     277,863        4.63      277,863        2.84
Thomas P. Ormandy....................................................     237,480        3.96      237,480        2.42
Ira J. Hechler.......................................................   1,217,042       20.28    1,217,042       12.42
Jon Hechler..........................................................     548,687        9.14      548,687        5.60
The Stanley Keller Irrevocable Trust (2).............................     395,307        6.59      395,307        4.03
Ronald S. Schmidt....................................................           0           *            0           *
Marc Baff............................................................           0           *            0           *
All directors and executive officers as a group (10 persons).........   4,452,110       74.20%   4,452,110       45.43%
</TABLE>
 
------------------------
 
*   Less than one percent.
 
(1) The business address of each person listed above beneficially owning more
    than 5% of the outstanding Common Stock is c/o I.C. Isaacs & Company, Inc.,
    3840 Bank Street, Baltimore, Maryland 21224-2522. Except as described below
    and subject to the Restated Shareholders' Agreement and applicable community
    property laws and similar laws, each person listed above has sole voting and
    investment power with respect to such shares. See "Certain
    Transactions--Restated Shareholders' Agreement."
 
(2) The trustees of the Stanley Keller Irrevocable Trust are Barbara Keller and
    Howard Schultz.
 
                                       47
<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
    Prior to the Offering, there has been no public market for the Common Stock.
No predictions can be made as to the effect, if any, that future sales of Common
Stock, and options to acquire shares of Common Stock, or the availability of
shares for future sale, will have on the market price prevailing from time to
time. Sales of substantial amounts of Common Stock in the public market, or the
perception that such sales may occur, could have a material adverse effect on
the market price of the Common Stock. See "Risk Factors--Future Sales by
Existing Stockholders; Shares Eligible for Future Sale" and "Management--1997
Omnibus Stock Plan."
 
    Upon the consummation of the Offering, the Company will have 9.8 million
shares of Common Stock outstanding. Of these shares, the 3.8 million shares of
Common Stock sold by the Company in the Offering will be freely tradable without
restriction or further registration under the Securities Act, unless held by an
"affiliate" of the Company (as that term is defined under the Securities Act).
Any such affiliate will be subject to the resale limitations of Rule 144 adopted
under the Securities Act. The remaining 6.0 million shares of Common Stock
outstanding are "restricted securities" for purposes of Rule 144 and are held by
"affiliates" of the Company within the meaning of Rule 144 under the Securities
Act. Restricted securities may not be resold in a public distribution except in
compliance with the registration requirements of the Securities Act or pursuant
to an exemption therefrom, including the exemption provided by Rule 144.
 
    In general, under Rule 144, a person (or persons whose shares are
aggregated), including a person who may be deemed to be an "affiliate" of the
Company, is entitled to sell within any three-month period a number of shares
beneficially owned for at least one year that does not exceed the greater of (i)
1% of the then outstanding shares of Common Stock or (ii) the average weekly
trading volume of the outstanding shares of Common Stock during the four
calendar weeks preceding such sale. Sales under Rule 144 are also subject to
certain requirements as to the manner of sale, notice and the availability of
current public information about the Company. However, a person (or persons
whose shares are aggregated) who is not an "affiliate" of the Company during the
90 days preceding a proposed sale by such person and who has beneficially owned
"restricted securities" for at least two years is entitled to sell such shares
under Rule 144 without regard to the volume, manner of sale or notice
requirements.
 
    The Company, together with each of its executive officers, directors and
stockholders beneficially owning in the aggregate 61.2% of the shares of Common
Stock outstanding after the Offering have entered into lock-up agreements with
The Robinson-Humphrey Company, LLC and Legg Mason Wood Walker, Incorporated, as
representatives of the Underwriters, pursuant to which they have agreed not to,
directly or indirectly, sell, offer to sell, contract to sell, solicit an offer
to buy, grant any option for the purchase or sale of, assign, pledge, distribute
or otherwise transfer, dispose of or encumber (or make any announcement with
respect to any of the foregoing), any of their shares of Common Stock (other
than those being sold pursuant to this Offering) or any options, rights,
warrants or other securities convertible into or exercisable or exchangeable for
Common Stock or evidencing any right to purchase or subscribe for shares of
Common Stock for a period of up to 180 days following the date of this
Prospectus without the prior written consent of the representatives of the
Underwriters. In addition, certain restrictions on transfers of shares of Common
Stock by the existing stockholders of the Company are contained in the Restated
Stockholders' Agreement. Sales of substantial amounts of Common Stock in the
public market, or the perception that such sales may occur, could have a
material adverse effect on the market price of the Common Stock. See "Certain
Transactions--Restated Shareholders' Agreement."
 
    The Company has adopted the 1997 Omnibus Stock Plan, pursuant to which an
aggregate of 500,000 shares are available for option grants and other equity
awards. See "Management--1997 Omnibus Stock Plan." The Company intends to file a
registration statement on Form S-8 under the Securities Act to register all of
the shares of Common Stock reserved for issuance under the Plan. Such
registration statement is expected to be filed as soon as practicable after the
date of the Offering and will automatically become effective upon filing. Shares
issued under the 1997 Omnibus Stock Plan after the registration statement is
filed may thereafter be sold in the public market, subject, in the case of the
various holders, to the Rule 144 volume limitations applicable to affiliates,
the lock-up agreement described above and any transfer or vesting restrictions
imposed on the date of the grant.
 
                                       48
<PAGE>
                          DESCRIPTION OF CAPITAL STOCK
 
    The following summary description of the capital stock of the Company is
qualified in its entirety by reference to the form of Restated Certificate and
the form of Restated By-laws, each to become effective upon consummation of the
Offering and each filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
 
    The authorized capital stock of the Company consists of 50.0 million shares
of Common Stock, par value $.0001 per share, and 5.0 million shares of Preferred
Stock, par value $.0001 per share.
 
COMMON STOCK
 
    Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of the stockholders, including the election of
directors. The Restated Certificate does not provide for cumulative voting in
the election of directors. Accordingly, holders of a majority of the shares of
Common Stock entitled to vote in any election of directors may elect all of the
directors standing for election. Subject to preferences that may be applicable
to any Preferred Stock outstanding at the time, holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the Board of Directors out of funds legally available therefor. See
"Dividend Policy." In the event of a liquidation, dissolution or winding up of
the Company, holders of Common Stock have no preemptive rights and no rights to
convert their Common Stock into any other securities and there are no redemption
provisions with respect to such shares. All of the outstanding shares of Common
Stock are fully paid and non-assessable. The rights, preferences and privileges
of holders of Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of Preferred Stock that the Board
of Directors may designate and that the Company may issue in the future.
 
    At present there is no established trading market for the Common Stock.
Application has been made for quotation of the Common Stock on the Nasdaq
National Market under the symbol "ISAC."
 
    The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, New York, New York.
 
PREFERRED STOCK
 
    The Restated Certificate provides that the Board of Directors, without
further action by the stockholders, may issue shares of the Preferred Stock in
one or more series and may fix or alter the relative, participating, optional or
other rights, preferences, privileges and restrictions, including the voting
rights, redemption provisions (including sinking fund provisions), dividend
rights, dividend rates, liquidation preferences and conversion rights, and the
description of and number of shares constituting any wholly unissued series of
Preferred Stock. The Board of Directors, without further stockholder approval,
can issue Preferred Stock with voting and conversion rights, which could
adversely affect the voting power of the holders of Common Stock. No shares of
Preferred Stock presently are outstanding, and the Company currently has no
plans to issue shares of Preferred Stock. The issuance of Preferred Stock in
certain circumstances may have the effect of delaying or preventing a change of
control of the Company without further action by the stockholders, may
discourage bids for the Company's Common Stock at a premium over the market
price of the Common Stock and may adversely affect the market price and the
voting and other rights of the holders of Common Stock.
 
CERTAIN CERTIFICATE OF INCORPORATION, BY-LAW AND STATUTORY PROVISIONS AFFECTING
  STOCKHOLDERS
 
    CLASSIFIED BOARD OF DIRECTORS.  The Company's Board of Directors is divided
into three classes of directors, designated Class I, Class II and Class III.
Each class shall consist, as nearly as possible, of one-third of the total
number of directors. The term of the initial Class I directors will terminate on
the date of the 1998 annual meeting of stockholders (an "Annual Meeting"), the
term of the initial Class II directors
 
                                       49
<PAGE>
will expire on the date of the 1999 Annual Meeting, and the term of the initial
Class III directors will expire on the date of the 2000 Annual Meeting. At each
Annual Meeting, beginning in 1998, successors to the class of directors whose
term expires at that Annual Meeting will be elected for a three-year term. See
"Management--Board of Directors." At least two annual meetings of stockholders,
instead of one, generally will be required to change the majority of the
Company's Board of Directors.
 
    SPECIAL MEETINGS OF STOCKHOLDERS; STOCKHOLDER ACTION BY WRITTEN
CONSENT.  The Restated Certificate provides that any action required or
permitted to be taken by the Company's stockholders may be effected without a
meeting, without prior notice and without a vote if a consent in writing is
signed by the holders of a number of shares that would be sufficient to take
such action at a meeting of the stockholders. Additionally, the Restated By-laws
provide that special meetings of the stockholders of the Company may be called
only by the Chairman of the Board of Directors, the Chief Executive Officer or
the President of the Company.
 
    ADVANCE NOTICE REQUIREMENTS OF STOCKHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS.  The Restated By-laws provide that stockholders seeking to bring
business before or to nominate directors at any meeting of stockholders, must
provide timely notice thereof in writing. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive offices
of the Company not less than 60 days nor more than 90 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that (i) in the event that the annual meeting is called for a
date that is not within 30 days before or after such anniversary date or (ii) in
the case of the annual meeting of stockholders held during the 1998 fiscal year
of the Company, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth day following the day
on which notice of the date of the annual meeting was mailed or public
disclosure of the date of the annual meeting was made, whichever first occurs.
The Restated By-laws also specify certain requirements for a stockholder's
notice to be in proper written form. These provisions may preclude some
stockholders from bringing matters before the stockholders or from making
nominations for directors.
 
    DIRECTOR AND OFFICER INDEMNIFICATION.  The Delaware Corporation Law provides
that a Delaware corporation may include provisions in its certificate of
incorporation relieving each of its directors of monetary liability arising out
of his or her conduct as a director for breach of his or her fiduciary duty
except liability for (i) any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions that are not in good
faith or involve intentional misconduct or a knowing violation of law, (iii)
conduct violating Section 174 of the Delaware Corporation Law (which section
relates to unlawful distributions) or (iv) any transaction from which a director
derived an improper personal benefit. The Company's Restated Certificate
includes such provisions.
 
    To the fullest extent permitted by the Delaware Corporation Law, as amended
from time to time, the Company's Restated Certificate and Restated By-laws
provide that the Company shall indemnify and advance expenses to each of its
currently acting and former directors and officers, and may so indemnify and
advance expenses to each of its current and former employees and agents. The
Company believes the foregoing provisions are necessary to attract and to retain
qualified persons as directors and officers. Prior to the consummation of the
Offering, the Company intends to enter into separate indemnification agreements
with each of its directors and executive officers in order to effectuate such
provisions.
 
                                       50
<PAGE>
                                  UNDERWRITING
 
    Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below, for whom The Robinson-Humphrey Company, LLC and Legg
Mason Wood Walker, Incorporated are acting as representatives (the
"Representatives"), have severally agreed to purchase from the Company and the
Company has agreed to sell to the Underwriters, the number of shares of Common
Stock set forth opposite their respective names.
 
<TABLE>
<CAPTION>
                                                                                     NUMBER
                                                                                       OF
UNDERWRITER                                                                          SHARES
---------------------------------------------------------------------------------  ----------
<S>                                                                                <C>
The Robinson-Humphrey Company, LLC...............................................
Legg Mason Wood Walker, Incorporated.............................................
                                                                                   ----------
    Total........................................................................   3,800,000
                                                                                   ----------
                                                                                   ----------
</TABLE>
 
    The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to purchase all shares of Common
Stock offered hereby if any are purchased.
 
    The Underwriters propose to offer the shares of Common Stock directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $    per share. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $    per share in sales to certain other dealers.
After the Offering, the public offering price and other selling terms may be
changed.
 
    The Company has granted to the Underwriters a 30-day option to purchase up
to an additional 570,000 shares of Common Stock at the Offering price less the
underwriting discount set forth on the cover page of this Prospectus to cover
over-allotments, if any.
 
    Prior to the offering made hereby, there has been no public market for the
Common Stock. The initial public Offering price for the Common Stock will be
determined through negotiations among the Company and the Representatives and
will not be based upon any independent appraisal or valuation of the Company.
Among the factors to be considered in making such determination are prevailing
market and general economic conditions, the market capitalization of
publicly-traded companies that the Company and the Representatives believe to be
comparable to the Company, the revenues and earnings of the Company in recent
periods, the experience of the Company's management, the economic characteristic
of the business in which the Company competes, estimates of the business
potential of the Company, the present state of the Company's development and
other factors deemed relevant.
 
    The Underwriters do not intend to confirm sales of shares of Common Stock to
any account over which they exercise discretionary authority. The
Representatives intend to make a market in the Common Stock after completion of
this Offering.
 
    The Company, together with each of its executive officers and directors and
stockholders beneficially owning in the aggregate __ million shares of Common
Stock, have entered into lock-up agreements with the Representatives pursuant to
which they have agreed not to, directly or indirectly, sell, offer to sell,
contract to sell, solicit an offer to buy, grant any option for the purchase or
sale of, assign, pledge, distribute or otherwise transfer, dispose of or
encumber (or make any announcement with respect to any of the foregoing) any
shares of Common Stock (other than those being sold pursuant to this Offering)
or any options, rights, warrants or other securities convertible into or
exercisable or exchangeable for Common
 
                                       51
<PAGE>
Stock or evidencing any right to purchase or subscribe for shares of Common
Stock for a period of 180 days from the date of this Prospectus without the
prior written consent of the Representatives.
 
    In connection with the Offering, the Underwriters may purchase and sell
shares of Common Stock in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the Offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Common Stock, and syndicate
short positions involve the sale by the Underwriters of a greater number of
shares of Common Stock than they are required to purchase from the Company in
the Offering. The Underwriters also may impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers in respect of
the shares sold in the Offering may be reclaimed by the syndicate if such shares
of Common Stock are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Common Stock, which may be higher than the price that might
otherwise prevail in the open market; and these activities, if commenced, may be
discontinued at any time. These transactions may be effected in the Nasdaq
National Market, in the over-the-counter market or otherwise.
 
    The Company has agreed to indemnify the Underwriters against, and to
contribute to losses arising out of, certain liabilities, including liabilities
under the Securities Act.
 
                                 LEGAL MATTERS
 
    The validity of the Common Stock offered hereby will be passed upon for the
Company by Piper & Marbury L.L.P. Certain legal matters relating to the Offering
will be passed upon for the Underwriters by Alston & Bird LLP.
 
                                    EXPERTS
 
    The consolidated financial statements and schedule included in this
Prospectus and in the Registration Statement have been audited by BDO Seidman,
LLP, independent certified public accountants, to the extent and for the periods
set forth in their reports appearing elsewhere herein and in the Registration
Statement and have been included herein in reliance upon such reports given upon
the authority of said firm as experts in accounting and auditing.
 
                                       52
<PAGE>
                             ADDITIONAL INFORMATION
 
    The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus, which is part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain items of which are omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company or the Common Stock, reference is made to the
Registration Statement and the exhibits and schedules filed as a part thereof.
Statements contained in this Prospectus regarding the contents of any contract
or any other document are not necessarily complete and, in each instance,
reference is hereby made to the copy of such contract or other document filed as
an exhibit to such Registration Statement. The Registration Statement, including
exhibits thereto, may be inspected, without charge, and copies of all or any
part thereof may be obtained upon payment of prescribed fees at the public
reference facilities of the Commission, maintained by the Commission at its
principal office located at 450 Fifth Street, N.W., Washington, D.C. 20549, the
New York Regional Office located at Seven World Trade Center, 13th Floor, New
York, New York 10048, and the Chicago Regional Office located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Such material may also be accessed electronically by means of the Commission's
home page on the Internet at http:\\www.sec.gov.
 
    Statements contained in this Prospectus concerning the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference.
 
    The Company intends to furnish its stockholders with annual reports
containing financial statements audited by independent accountants and with
quarterly reports containing unaudited financial information for each of the
first three quarters of each fiscal year.
 
                                       53
<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<S>                                                                                     <C>
Report of Independent Certified Public Accountants....................................        F-2
 
Consolidated Balance Sheets at December 31, 1995, 1996 and June 30, 1997
  (unaudited).........................................................................        F-3
 
Consolidated Statements of Income for the years ended December 31, 1994, 1995, 1996
  and the six months ended June 30, 1996 and June 30, 1997 (unaudited)................        F-4
 
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1994,
  1995, 1996 and the six months ended June 30, 1996 and June 30, 1997 (unaudited).....        F-5
 
Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1995,
  1996 and the six months ended June 30, 1996 and June 30, 1997 (unaudited)...........        F-6
 
Notes to Consolidated Financial Statements............................................        F-7
</TABLE>
 
                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To the Board of Directors and Stockholders
I.C. Isaacs & Company, Inc.
Baltimore, Maryland
 
    We have audited the accompanying consolidated balance sheets of I.C. Isaacs
& Company, Inc. and subsidiaries as of December 31, 1995 and 1996 and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1996. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of I.C. Isaacs
& Company, Inc. and subsidiaries at December 31, 1995 and 1996 and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted accounting
principles.
 
                                          BDO Seidman, LLP
 
Washington, D.C.
March 31, 1997, except
for Note 9, the dates of
which are May 15, 1997
and September 24, 1997
and Note 5, the
date of which is
September 30, 1997
 
                                      F-2
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                          DECEMBER 31,                           PRO FORMA
                                                                  ----------------------------    JUNE 30,       JUNE 30,
                                                                      1995           1996           1997           1997
                                                                  -------------  -------------  -------------  -------------
<S>                                                               <C>            <C>            <C>            <C>
                                                                                                        (UNAUDITED)
ASSETS
 
Current
  Cash, including temporary investments of $779,436, $368,175
    and $421,534................................................  $   1,411,954  $     938,799  $   1,503,654  $   1,224,114
  Accounts receivable, less allowance for doubtful accounts of
    $350,000, $660,000 and $700,000 (Note 3)....................     10,365,050     16,582,990     25,470,164     25,470,164
  Inventories (Notes 1 and 3)...................................     14,323,730     14,090,974     22,007,213     22,007,213
  Prepaid expenses and other....................................        703,267      1,266,655      1,505,699      1,505,699
                                                                  -------------  -------------  -------------  -------------
Total current assets............................................     26,804,001     32,879,418     50,486,730     50,207,190
Property, Plant and Equipment, at cost, less accumulated
  depreciation and amortization (Notes 2 and 3).................      2,818,637      2,399,822      2,595,631      2,595,631
Goodwill, less accumulated amortization of $731,025, $797,265
  and $813,825..................................................      1,921,075      1,854,835      1,821,715      1,821,715
Other Assets (Note 5)...........................................        219,941        122,565        212,113      1,512,113
                                                                  -------------  -------------  -------------  -------------
                                                                  $  31,763,654  $  37,256,640  $  55,116,189  $  56,136,649
                                                                  -------------  -------------  -------------  -------------
                                                                  -------------  -------------  -------------  -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
  Checks issued against future deposits.........................  $   1,217,832  $   1,150,679  $   2,177,148  $   2,177,148
  Current maturities of term loan and revolving line of credit
    (Note 3)....................................................      7,417,500      6,520,418     18,300,006     18,300,006
  Current maturities of capital lease obligations (Note 3)......        223,999        216,764        178,931        178,931
  Accounts payable..............................................      5,110,126      6,378,310      7,481,040      7,481,040
  Accrued expenses and other current liabilities (Note 4).......      1,816,957      2,144,277      2,719,607      2,719,607
  Accrued compensation..........................................        210,810        194,710        241,682        241,682
  Distribution payable..........................................       --             --             --           15,400,000
                                                                  -------------  -------------  -------------  -------------
Total current liabilities.......................................     15,997,224     16,605,158     31,098,414     46,498,414
                                                                  -------------  -------------  -------------  -------------
Long-term Debt (Note 3)
  Term loan.....................................................        116,649        699,994        599,992        599,992
  Capital lease obligations.....................................        575,403        358,638        272,636        272,636
  Junior subordinated notes.....................................        311,130       --             --             --
                                                                  -------------  -------------  -------------  -------------
Total long-term debt............................................      1,003,182      1,058,632        872,628        872,628
                                                                  -------------  -------------  -------------  -------------
Minority interest...............................................        118,431        200,273        279,540       --
                                                                  -------------  -------------  -------------  -------------
Commitments and Contingencies (Notes 3,
  5 and 6)
STOCKHOLDERS' EQUITY (Note 9):
  Preferred stock; $.0001 par value; 5,000,000 shares
    authorized, none outstanding................................       --             --             --             --
  Common stock; $.0001 par value; 50,000,000 shares authorized;
    6,037,048 shares issued; 6,000,000 shares outstanding.......            604            604            604            604
  Additional paid-in capital....................................        266,377        266,377        266,377        266,377
  Retained earnings.............................................     14,392,704     19,140,464     22,613,494      8,513,494
  Treasury stock, at cost (37,048 shares).......................        (14,868)       (14,868)       (14,868)       (14,868)
                                                                  -------------  -------------  -------------  -------------
Total stockholders' equity......................................     14,644,817     19,392,577     22,865,607      8,765,607
                                                                  -------------  -------------  -------------  -------------
                                                                  $  31,763,654  $  37,256,640  $  55,116,189  $  56,136,649
                                                                  -------------  -------------  -------------  -------------
                                                                  -------------  -------------  -------------  -------------
</TABLE>
 
   See accompanying summary of accounting policies and notes to consolidated
                             financial statements.
 
                                      F-3
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                       CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                                                    SIX MONTHS
                                                       YEARS ENDED DECEMBER 31,                   ENDED JUNE 30,
                                             --------------------------------------------  ----------------------------
                                                 1994           1995            1996           1996           1997
                                             -------------  -------------  --------------  -------------  -------------
<S>                                          <C>            <C>            <C>             <C>            <C>
                                                                                                   (UNAUDITED)
Net sales..................................  $  85,298,186  $  93,271,157  $  118,655,253  $  51,898,868  $  77,709,554
Cost of sales..............................     62,216,041     68,529,969      84,421,651     36,223,683     52,020,970
                                             -------------  -------------  --------------  -------------  -------------
Gross profit...............................     23,082,145     24,741,188      34,233,602     15,675,185     25,688,584
                                             -------------  -------------  --------------  -------------  -------------
Operating Expenses
  Selling (Note 5).........................     10,473,631     12,101,456      16,714,871      8,056,958     11,630,072
  Distribution and shipping................      2,045,911      2,378,728       2,669,093      1,227,549      1,977,534
  General and administrative...............      5,813,853      5,786,524       6,243,327      2,733,753      3,375,974
  Recovery of legal fees (Note 5)..........       --             --              (718,558)      --             (117,435)
                                             -------------  -------------  --------------  -------------  -------------
Total operating expenses...................     18,333,395     20,266,708      24,908,733     12,018,260     16,866,145
                                             -------------  -------------  --------------  -------------  -------------
Operating income...........................      4,748,750      4,474,480       9,324,869      3,656,925      8,822,439
                                             -------------  -------------  --------------  -------------  -------------
Other Income (Expense)
  Interest.................................     (1,191,047)    (1,247,353)     (1,365,163)      (659,972)      (922,251)
  Other, net (Note 8)......................      1,235,030         (3,178)         84,795         81,792         22,198
                                             -------------  -------------  --------------  -------------  -------------
Total other income (expense)...............         43,983     (1,250,531)     (1,280,368)      (578,180)      (900,053)
                                             -------------  -------------  --------------  -------------  -------------
Income before minority interest and
  extraordinary item.......................      4,792,733      3,223,949       8,044,501      3,078,745      7,922,386
Minority interest..........................        (52,520)       (32,593)        (81,842)       (30,974)       (79,267)
                                             -------------  -------------  --------------  -------------  -------------
Income before extraordinary item...........      4,740,213      3,191,356       7,962,659      3,047,771      7,843,119
Extraordinary Item--Gain on extinguishment
  of debt (Note 3).........................        388,770       --              --             --             --
                                             -------------  -------------  --------------  -------------  -------------
Net income.................................  $   5,128,983  $   3,191,356  $    7,962,659  $   3,047,771  $   7,843,119
                                             -------------  -------------  --------------  -------------  -------------
                                             -------------  -------------  --------------  -------------  -------------
Pro forma financial information:
Income before income taxes, as presented...  $   5,128,983  $   3,191,356  $    7,962,659  $   3,047,771  $   7,843,119
Pro forma provision for income taxes
  (unaudited)..............................      2,103,000      1,308,000       3,265,000      1,250,000      3,216,000
                                             -------------  -------------  --------------  -------------  -------------
Pro forma net income (unaudited)...........  $   3,025,983  $   1,883,356  $    4,697,659  $   1,797,771  $   4,627,119
                                             -------------  -------------  --------------  -------------  -------------
                                             -------------  -------------  --------------  -------------  -------------
Pro forma earnings per share (unaudited)...                                $         0.65                 $        0.64
Weighted average shares outstanding........                                     7,184,615                     7,184,615
</TABLE>
 
   See accompanying summary of accounting policies and notes to consolidated
                             financial statements.
 
                                      F-4
<PAGE>
                         I.C. ISAACS AND COMPANY, INC.
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                     PREFERRED STOCK            COMMON STOCK       ADDITIONAL
                                 ------------------------  ----------------------    PAID-IN     RETAINED   TREASURY
                                   SHARES       AMOUNT      SHARES      AMOUNT       CAPITAL     EARNINGS     STOCK      TOTAL
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
<S>                              <C>          <C>          <C>        <C>          <C>          <C>         <C>        <C>
Balance at December 31, 1993...      --           --       6,037,048   $     604    $ 247,589   $10,611,742 $ (63,143) $10,796,792
Net income.....................      --           --          --          --           --        5,128,983     --       5,128,983
Stockholder distributions......      --           --          --          --           --       (1,603,511)    --      (1,603,511)
Purchase of treasury stock
  (100 shares).................      --           --          --          --           --           --        (13,579)    (13,579)
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
Balance at December 31, 1994...      --           --       6,037,048         604      247,589   14,137,214    (76,722) 14,308,685
Net income.....................      --           --          --          --                     3,191,356     --       3,191,356
Stockholder distributions......      --           --          --          --           --       (2,935,866)            (2,935,866)
Sale of treasury stock (100
  shares)......................      --           --          --          --           18,788       --         61,854      80,642
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
Balance at December 31, 1995...      --           --       6,037,048         604      266,377   14,392,704    (14,868) 14,644,817
Net income.....................      --           --          --          --           --        7,962,659              7,962,659
Stockholder distributions......      --           --          --          --           --       (3,214,899)    --      (3,214,899)
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
Balance at December 31, 1996...      --           --       6,037,048         604      266,377   19,140,464    (14,868) 19,392,577
Net income (unaudited).........      --           --          --          --           --        7,843,119     --       7,843,119
Stockholder distributions
  (unaudited)..................      --           --          --          --           --       (4,370,089)    --      (4,370,089)
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
Balance at June 30, 1997
  (unaudited)..................      --           --       6,037,048   $     604    $ 266,377   $22,613,494 $ (14,868) $22,865,607
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
                                 -----------  -----------  ---------  -----------  -----------  ----------  ---------  ----------
</TABLE>
 
   See accompanying summary of accounting policies and notes to consolidated
                             financial statements.
 
                                      F-5
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                          SIX MONTHS ENDED
                                                        YEARS ENDED DECEMBER 31,              JUNE 30,
                                                   ----------------------------------  -----------------------
                                                      1994        1995        1996        1996        1997
                                                   ----------  ----------  ----------  ----------  -----------
<S>                                                <C>         <C>         <C>         <C>         <C>
                                                                                             (UNAUDITED)
Operating Activities
  Net income.....................................  $5,128,983  $3,191,356  $7,962,659  $3,047,771  $ 7,843,119
  Adjustments to reconcile net income to net cash
    provided by operating activities
    Write-off of other assets....................      61,981      --          --          --          --
    Extraordinary gain...........................    (388,770)     --          --          --          --
    Provision for doubtful accounts..............     278,338     398,451   1,193,693     391,646      553,895
    Write-off of accounts receivable.............    (428,338)   (398,451)   (883,693)   (391,646)    (513,895)
    Provision for sales returns and discounts....   5,545,414   5,104,266   5,955,658   2,297,288    4,790,896
    Sales returns and discounts..................  (5,483,107) (5,062,285) (5,717,525) (2,169,616)  (5,190,096)
    Provision of overcharges.....................      --          --          --          --          150,450
    Depreciation and amortization................   1,512,934   1,477,450   1,359,252     766,529      495,669
    (Gain) loss on sale of assets................      --          99,115     (71,800)     --          --
    Minority interest............................      52,520      32,594      81,842      30,975       79,267
    (Increase) decrease in assets
      Accounts receivable........................  (2,915,062)    886,051  (6,766,073) (5,747,646)  (8,678,424)
      Inventories................................     470,913  (2,936,042)    232,756  (1,323,231)  (7,916,239)
      Prepaid expenses and other.................     459,543    (161,621)   (563,388)   (119,115)    (239,044)
      Other assets...............................    (325,000)     --          --          --          --
    Increase (decrease) in liabilities
      Checks issued against future deposits......     440,374     345,929     (67,153)    245,239    1,026,469
      Accounts payable...........................  (1,099,403)    971,255   1,268,184   1,725,557    1,102,730
      Accrued expenses and other current
        liabilities..............................     665,696      43,334     327,320    (430,376)      46,972
    Accrued compensation.........................      52,470     (44,030)    (16,100)    (79,663)     575,331
                                                   ----------  ----------  ----------  ----------  -----------
Cash provided by (used in) operating
activities.......................................   4,029,486   3,947,372   4,295,632  (1,756,288)  (5,872,900)
                                                   ----------  ----------  ----------  ----------  -----------
Investing Activities
  (Purchase) sale of treasury stock..............     (13,579)     80,642      --          --          --
  Proceeds from sale of assets...................      --          13,750      71,800      --          --
  Capital expenditures...........................    (676,648)   (669,464)   (701,821)   (163,244)    (639,609)
                                                   ----------  ----------  ----------  ----------  -----------
Cash used in investing activities................    (690,227)   (575,072)   (630,021)   (163,244)    (639,609)
                                                   ----------  ----------  ----------  ----------  -----------
Financing Activities
  Stockholder distributions......................  (1,603,511) (2,935,866) (3,214,899) (1,476,959)  (4,370,089)
  Principal payments on debt.....................  (1,783,263)   (760,618) (1,632,216)   (222,001)    (223,836)
  Principal proceeds from debt...................     833,230     291,552     783,349   3,453,782   11,779,587
  Deferred financing costs.......................      --          --         (75,000)    (75,000)    (108,298)
                                                   ----------  ----------  ----------  ----------  -----------
Cash provided by (used in) financing
activities.......................................  (2,553,544) (3,404,932) (4,138,766)  1,679,822    7,077,364
                                                   ----------  ----------  ----------  ----------  -----------
Increase (decrease) in cash and cash
equivalents......................................     785,715     (32,632)   (473,155)   (239,710)     564,855
Cash and Cash Equivalents, at beginning of
period...........................................     658,871   1,444,586   1,411,954   1,411,954      938,799
                                                   ----------  ----------  ----------  ----------  -----------
Cash and Cash Equivalents, at end of period......  $1,444,586  $1,411,954  $  938,799  $1,172,244  $ 1,503,654
                                                   ----------  ----------  ----------  ----------  -----------
                                                   ----------  ----------  ----------  ----------  -----------
</TABLE>
 
   See accompanying summary of accounting policies and notes to consolidated
                             financial statements.
 
                                      F-6
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                         SUMMARY OF ACCOUNTING POLICIES
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
BASIS OF PRESENTATION
 
    The consolidated financial statements include the accounts of I.C. Isaacs &
Company, Inc. ("ICI"), I.C. Isaacs Europe, S.L. ("Isaacs Europe") and I.C.
Isaacs & Company L.P. (the "Partnership"). Collectively, ICI, Isaacs Europe and
the Partnership are referred to herein as the "Company." ICI, operates as the
general partner of the Partnership and has a 99% ownership interest. The limited
partner, with a 1% ownership interest, is an individual. The Company has
accounted for the 1% limited partner's ownership as a minority interest in the
accompanying consolidated financial statements. The Company established Isaacs
Europe in July 1996 as the exclusive licensee of Beverly Hills Polo Club
sportswear in Europe. Isaacs Europe did not have any significant revenue or
expenses in 1996 or through June 30, 1997. All intercompany balances and
transactions have been eliminated.
 
BUSINESS DESCRIPTION
 
    The Company, which operates in one business segment, designs, manufactures
and markets branded sportswear for men, women and boys under the BOSS brand in
the United States and Puerto Rico and under the Beverly Hills Polo Club brand in
the United States, Puerto Rico and Europe. The Company also manufactures women's
sportswear under various Company-owned brand names as well as under third-party
private labels.
 
INTERIM FINANCIAL INFORMATION
 
    The financial information as of June 30, 1997 and for the six months ended
June 30, 1996 and 1997 is unaudited. In the opinion of management, such
information contains all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for such periods.
Results for interim periods are not necessarily indicative of results to be
expected for an entire year.
 
REORGANIZATION AND PRO FORMA INFORMATION (UNAUDITED)
 
    ICI has or will initiate certain events (the "Reorganization") in connection
with its initial public offering of common stock. ICI has established a
wholly-owned subsidiary ("Isaacs Design, Inc.") to purchase, at book value, the
ownership interest in the Partnership held by the limited partner. Consequently,
upon completion of the initial public offering, the consolidated group will
include ICI, Isaacs Design, Inc., Isaacs Europe and the Partnership. In
connection with the Reorganization, ICI will declare a dividend to the
stockholders representing earned but undistributed earnings through the closing
date of the Reorganization.
 
    Concurrently with the Reorganization, ICI will terminate its Subchapter S
corporation status and will become subject to federal and state income taxes.
The accompanying consolidated statements of income reflect a pro forma provision
for income taxes for the years ended December 31, 1994, 1995 and 1996 and for
the six-month periods ended June 30, 1996 and 1997, based upon pretax income as
if the consolidated group discussed above had been subject to federal and state
income taxes, based on an estimated effective tax rate of 41.0%. In connection
with termination of its Subchapter S corporation status, ICI will record a net
deferred tax asset and accompanying tax benefit to reflect the differences in
the financial statement and income tax bases of the assets and liabilities which
principally relate to uniform inventory capitalization, allowance for doubtful
accounts, depreciation and other accruals. If the Subchapter S corporation
status had terminated on June 30, 1997, the net deferred tax asset that would
have been recognized would have been approximately $1.3 million.
 
                                      F-7
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                   SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
    Pro forma earnings per share are based on pro forma net income and the
weighted average number of shares of common stock outstanding adjusted to
include the estimated number of shares (1,184,615) being sold by ICI which would
be necessary to fund the distribution of all previously earned but undistributed
Subchapter S corporation earnings. This amount, estimated at $15.4 million as of
June 30, 1997, will be paid as the initial Subchapter S corporation distribution
upon the closing of the initial public offering.
 
    Supplementary pro forma net income per share for the year ended December 31,
1996 and the six months ended June 30, 1997 of $0.69 and $0.59, respectively, is
based upon the weighted number of shares of common stock used in the calculation
of pro forma net income per share increased by the sale of 555,416 and 1,453,846
shares, respectively, assuming an initial offering price of $13.00, the proceeds
of which would be necessary to repay approximately $7,220,408 and $18,899,998,
respectively, of the Company's term loan and revolving line of credit.
 
    The pro forma balance sheet as of June 30, 1997 reflects the termination of
the Subchapter S corporation status, establishment of the net deferred tax
asset, declaration of the dividend of the earned but undistributed Subchapter S
corporation earnings and the purchase of the minority interest as if they had
occurred on June 30, 1997.
 
RISKS AND UNCERTAINTIES
 
    The apparel industry is highly competitive. The Company competes primarily
with larger, well capitalized companies, which may seek to increase market share
through price reductions. The risk to the Company is that such a strategy may
ultimately lead to reduced profit margins. In the past several years, many of
the Company's competitors have switched much of their apparel manufacturing from
the United States to foreign locations such as Mexico, the Dominican Republic
and throughout Asia. As competitors lower production costs it gives them greater
flexibility to alter prices. Over the last several years, the Company has
switched a significant portion of its production to contractors outside the
United States to reduce costs. Management believes that it will continue this
strategy for the foreseeable future.
 
    The Company faces the uncertainty of the continued availability of increases
in its borrowing capacity. Adequate working capital is essential to an apparel
manufacturer due to the significant cash investment in inventory and accounts
receivable and the long lead time between payment for such inventory and
collection of customer receivables. The Company believes that it has an
excellent relationship with its asset-based lender and that it will be able to
obtain sufficient working capital to finance its requirements.
 
    The Company faces other risks inherent in the apparel industry. These risks
include changes in fashion trends and related consumer acceptance and the
continuing consolidation in the retail segment of the apparel industry. The
Company's ability, or inability, to manage these risk factors could influence
future financial and operating results.
 
USE OF ESTIMATES
 
    The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make certain estimates and
assumptions, particularly regarding valuation of accounts receivable and
inventory, recognition of liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from those estimates.
 
                                      F-8
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                   SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
CONCENTRATION OF CREDIT RISK
 
    Financial instruments which potentially expose the Company to concentrations
of credit risk consist primarily of trade accounts receivable. The Company's
customer base is not concentrated in any specific geographic region but is
concentrated in the retail industry. For the years ended December 31, 1994, 1995
and 1996 sales to one customer were 20.0%, 19.0% and 13.0% of total sales,
respectively. The significant customer was the same in 1994 and 1995, but was
different in 1996. For the six months ended June 30, 1996 and 1997 sales to one
customer were 14.0% and 13.0% of total sales, respectively. The Company reviews
a customer's credit history before extending credit and establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information. The Company's actual bad
debt as a percentage of net sales has been less than one-half of one percent.
 
    The Company is also subject to concentrations of credit risk with respect to
its cash and cash equivalents, which it minimizes by placing these funds with
high-quality institutions.
 
INVENTORIES
 
    Inventories are stated at the lower of cost or market. Cost is determined by
the first-in, first-out (FIFO) method.
 
PROPERTY, PLANT AND EQUIPMENT
 
    Property and equipment are stated at cost. Depreciation is computed over the
estimated useful lives of the assets by both straight-line and accelerated
methods. Leasehold improvements are amortized using the straight-line method
over the life of the lease.
 
GOODWILL
 
    The Company has recorded goodwill based on the excess of purchase price over
net assets acquired, and it is being amortized on a straight-line basis over 40
years. The Company periodically evaluates goodwill for possible impairment. The
analysis consists of a comparison of future projected undiscounted cash flows to
the carrying value of the goodwill. Any excess goodwill would be written off due
to impairment.
 
LICENSES
 
    Included in other assets is the cost of certain licenses which allow the
Company to manufacture and market certain branded apparel. The Company
capitalized the cost of obtaining the licenses, and the cost of the licenses is
being amortized on a straight-line basis over the initial term of three years.
The Company accrues royalty expense related to the licenses at the greater of
the specified percentage of sales or the minimum guaranteed royalty set forth in
the license agreements.
 
REVENUE RECOGNITION
 
    Sales are recognized upon shipment of products. Allowances for estimated
returns are provided when sales are recorded.
 
                                      F-9
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                   SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
ADVERTISING COSTS
 
    Advertising costs, included in selling expenses, are expensed as incurred
and were $368,765, $1,498,001, $2,529,109, $1,310,092 and $1,619,346 for the
years ended December 31, 1994, 1995, 1996 and six months ended June 30, 1996 and
1997, respectively.
 
CASH EQUIVALENTS
 
    For purposes of the statements of cash flows, all temporary investments
purchased with a maturity of three months or less are considered to be cash
equivalents.
 
INCOME TAXES
 
    The entities in the consolidated group include principally a Subchapter S
corporation and a partnership which are not subject to federal or certain state
income taxes. Therefore, the Company has made no provision for income taxes in
the accompanying financial statements as taxes are the liability of the
respective stockholders and partners.
 
    The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
109"). Under SFAS 109, deferred taxes are determined using the liability method
which requires the recognition of deferred tax assets and liabilities based on
differences between financial statement and income tax bases using presently
enacted tax rates.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
    Financial instruments of the Company include long-term debt. Based upon
current borrowing rates available to the Company, estimated fair values of these
financial instruments approximate their recorded amounts.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
    In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"). SFAS 123 will begin to affect the Company in fiscal
1997 with the establishment of the 1997 Omnibus Stock Plan. See
"Management--1997 Omnibus Stock Plan." The Company will adopt only the
disclosure provisions of SFAS 123 and account for stock-based compensation using
the intrinsic value method set forth in APB Opinion 25.
 
    In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS
128 provides a different method of calculating earnings per share than is
currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic
and diluted earnings per share. Basic earnings per share includes no dilution
and is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of an entity, similar to existing fully diluted earnings
per share. As required by the policies of the Securities and Exchange Commission
(the "Commission"), the Company has treated the shares being sold to fund the S
Corporation Distribution as outstanding prior to the Offering. SFAS 128 does not
have a provision requiring such treatment. The Commission is currently
evaluating its policies concerning this issue. Assuming shares issued to fund
the S Corporation Distribution continue to be treated as outstanding prior to
the Offering, the Company believes adopting SFAS 128 will not have a
 
                                      F-10
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                   SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
material effect on its calculation of earnings per share. The Company will adopt
the provisions for computing earnings per share set forth in SFAS 128 in
December 1997.
 
    Statement of Financial Accounting Standards No. 129, Disclosure of
Information about Capital Structure ("SFAS 129") effective for periods ending
after December 15, 1997, establishes standards for disclosing information about
an entity's capital structure. SFAS 129 requires disclosure of the pertinent
rights and privileges of various securities outstanding (stock, options,
warrants, preferred stock, debt and participation rights) including dividend and
liquidation preferences, participant rights, call prices and dates, conversion
or exercise prices and redemption requirements. Adoption of SFAS 129 will have
no effect on the Company as it currently discloses the information specified.
 
    In June 1997, the Financial Accounting Standards Board issued two new
disclosure standards. The Company's results of operations and financial position
will be unaffected by implementation of these new standards.
 
    Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS 130"), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.
 
    Statement of Financial Accounting Standards No. 131, Disclosure about
Segments of a Business Enterprise ("SFAS 131"), establishes standards for the
way that public enterprises report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and services,
geographic areas and major customers. SFAS 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
 
    Both SFAS 130 and SFAS 131 are effective for financial statements for
periods beginning after December 15, 1997 and require comparative information
for earlier years to be restated. Due to the recent issuance of these standards,
management has been unable to fully evaluate the impact, if any, they may have
on future financial statement disclosures.
 
                                      F-11
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
1. INVENTORIES
 
    Inventories consist of the following:
 
<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                  ----------------------------    JUNE 30,
                                                      1995           1996           1997
                                                  -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
Raw materials and work-in-process...............  $   5,068,996  $   6,491,950  $   7,533,430
Finished goods..................................      9,254,734      7,599,024     14,473,783
                                                  -------------  -------------  -------------
                                                  $  14,323,730  $  14,090,974  $  22,007,213
                                                  -------------  -------------  -------------
                                                  -------------  -------------  -------------
</TABLE>
 
2. PROPERTY, PLANT AND EQUIPMENT
 
    Property, plant and equipment consists of the following:
 
<TABLE>
<CAPTION>
                                              DECEMBER 31,                        ESTIMATED
                                       --------------------------    JUNE 30,      USEFUL
                                           1995          1996          1997         LIVES
                                       ------------  ------------  ------------  -----------
<S>                                    <C>           <C>           <C>           <C>
Land.................................   $  185,660   $    185,660  $    188,160
Buildings and improvements...........    5,301,761      5,301,761     5,301,761    18 years
Machinery, equipment and fixtures....    7,878,836      8,570,577     9,112,546   5-7 years
Other................................    1,025,362      1,035,442     1,130,582     various
                                       ------------  ------------  ------------
                                        14,391,619     15,093,440    15,733,049
Less accumulated depreciation and
  amortization.......................   11,572,982     12,693,618    13,137,418
                                       ------------  ------------  ------------
                                        $2,818,637   $  2,399,822  $  2,595,631
                                       ------------  ------------  ------------
                                       ------------  ------------  ------------
</TABLE>
 
                                      F-12
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
3. LONG-TERM DEBT
 
    Long-term debt consists of the following:
 
<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                    --------------------------    JUNE 30,
                                                        1995          1996          1997
                                                    ------------  ------------  -------------
<S>                                                 <C>           <C>           <C>
Term loan (a).....................................  $    316,653  $    899,998  $     799,996
Revolving line of credit (a)......................     7,207,496     6,320,414     18,100,002
Installment purchase obligations (b)..............        10,000       --            --
                                                    ------------  ------------  -------------
                                                       7,534,149     7,220,412     18,899,998
Capital lease obligations (c).....................       799,402       575,402        451,567
Junior subordinated notes (d).....................       311,130       --            --
                                                    ------------  ------------  -------------
Total.............................................  $  8,644,681  $  7,795,814  $  19,351,565
Less current maturities of long-term debt and
  revolving line of credit........................     7,417,500     6,520,418     18,300,006
Less current maturities of capital lease
  obligations.....................................       223,999       216,764        178,931
                                                    ------------  ------------  -------------
                                                    $  1,003,182  $  1,058,632  $     872,628
                                                    ------------  ------------  -------------
                                                    ------------  ------------  -------------
</TABLE>
 
    (a) The Company has a renewable term loan agreement with a borrowing limit
of $1,000,000. The term loan facility is payable in 60 monthly installments of
$16,667 and is collateralized by property and equipment. The term loan facility
may be renewed for periods of 60 months at the option of the lender. The term
loan facility bears interest at the prime rate of interest plus 2.5%
(effectively 11.0% at June 30, 1997) and is payable monthly.
 
    The revolving line of credit agreement and letter of credit arrangement
provide that the Company may borrow up to 80% of the net amount of eligible
accounts receivable and a portion of imported inventory, as defined in the
financing agreement. The revolving line of credit expires on June 30, 1998.
Borrowings under the revolving line of credit and outstanding letters of credit
(limited to $10.0 million) may not exceed $30.0 million and bear interest at the
prime rate of interest plus 1.0% (effectively 9.5% at June 30, 1997). Additional
borrowings available under the revolving line of credit and letter of credit
agreements are approximately $2.6 million at June 30, 1997. Borrowings under
these agreements are collateralized by the Company's accounts receivable,
imported inventories and other assets. Outstanding letters of credit
approximated $9.5 million at June 30, 1997. Among the provisions of the
financing agreement are requirements to maintain specified levels of working
capital and net worth. Retained earnings of approximately $8.0 million are
restricted as to the payment of dividends.
 
                                      F-13
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
3. LONG-TERM DEBT (CONTINUED)
    Average short-term borrowings and the related interest rates are as follows:
 
<TABLE>
<CAPTION>
                                                                                 SIX MONTHS
                                                          YEARS ENDED               ENDED
                                                          DECEMBER 31,            JUNE 30,
                                                  ----------------------------  -------------
                                                      1995           1996           1997
                                                  -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
Borrowings under revolving line of credit.......  $   7,207,496  $   6,320,414  $  11,779,587
Weighted average interest rate..................           9.88%          9.25%          9.50%
Maximum month-end balance during the period.....  $  10,649,725  $  11,024,807  $  18,261,269
Average balance during the period...............  $   8,518,496  $   9,814,896  $  15,880,483
</TABLE>
 
    (b) The Company's plants were financed by the issuance of industrial revenue
and general obligation bonds by municipalities in Mississippi. These obligations
bore interest at rates varying between 5% and 14%. The Company repaid the
remaining obligation in 1996.
 
    (c) The Company leases equipment under various capital leases which are
included in property, plant and equipment in the amount of $1,048,037 at
December 31, 1995 and 1996 and June 30, 1997. Amortization expense related to
assets under capital leases amounted to $276,080, $190,987, $150,058, $116,856
and $58,947 for the years ended December 31, 1994, 1995, 1996 and the six months
ended June 30, 1996 and 1997, respectively.
 
    As of December 31, 1996, future net minimum lease payments under capital
leases that have initial or remaining noncancelable lease terms in excess of one
year are as follows:
 
<TABLE>
<S>                                                                 <C>
1997..............................................................  $ 267,208
1998..............................................................    202,827
1999..............................................................    189,551
2000..............................................................      6,296
                                                                    ---------
Total minimum lease payments......................................    665,882
Less: amount representing interest................................    (90,480)
                                                                    ---------
Present value of net minimum lease payments.......................    575,402
Less: current portion.............................................   (216,764)
                                                                    ---------
Long-term capital lease obligations...............................  $ 358,638
                                                                    ---------
                                                                    ---------
</TABLE>
 
    (d) Junior subordinated notes totaling $311,130 were due to stockholders of
ICI and had a maturity date of June 1998. Interest was calculated at the prime
rate of interest plus 1.5% but could not exceed 16.0%. The Company repaid these
subordinated notes in October 1996.
 
    As of December 31, 1993, the Company had two junior subordinated notes
outstanding to a former partner in the Partnership which totalled $1,500,000
plus approximately $150,000 in contingent fees. The notes were due in full by
February 1995. On September 30, 1994, the Company repaid the two notes, at a
discount of 15.0%, as well as accrued interest through September 30, 1994. The
Company recognized an extraordinary gain of $388,770 for the difference between
the carrying value of the subordinated debt,
 
                                      F-14
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
3. LONG-TERM DEBT (CONTINUED)
including accrued interest and contingent payments of $1,810,104 and the
repayment amount of $1,421,334.
 
    Scheduled maturities of the Company's term loan and revolving line of credit
are as follows:
 
<TABLE>
<S>                                                                  <C>
1997...............................................................  $6,520,418
1998...............................................................    200,004
1999...............................................................    200,004
2000...............................................................    200,004
2001...............................................................     99,982
                                                                     ---------
                                                                     $7,220,412
                                                                     ---------
                                                                     ---------
</TABLE>
 
4. ACCRUED EXPENSES
 
    Accrued expenses consist of the following:
 
<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                      --------------------------    JUNE 30,
                                                          1995          1996          1997
                                                      ------------  ------------  ------------
<S>                                                   <C>           <C>           <C>
Royalties...........................................  $    878,918  $  1,194,637  $  1,592,350
Accrued professional fees...........................       100,000       150,000       100,000
Payable to salesmen.................................       233,818       152,701       228,056
Severance agreements................................       145,913       103,745        14,129
Payroll tax withholdings............................       231,142       145,736       359,416
Customer credit balances............................       177,402       254,244       211,120
Accrued bonuses.....................................       --            --            151,000
Other...............................................        49,764       143,214        63,536
                                                      ------------  ------------  ------------
                                                      $  1,816,957  $  2,144,277  $  2,719,607
                                                      ------------  ------------  ------------
                                                      ------------  ------------  ------------
</TABLE>
 
5. COMMITMENTS AND CONTINGENCIES
 
    The Company rents real and personal property under leases expiring at
various dates through 1999. Certain of the leases stipulate payment of real
estate taxes and other occupancy expenses. Minimum annual rental commitments
under noncancellable operating leases in effect at December 31, 1996 are
summarized as follows:
 
<TABLE>
<CAPTION>
                                                                                     COMPUTER
                                                            TRUCKS     SHOWROOMS     HARDWARE   MACHINERY      TOTAL
                                                          ----------  ------------  ----------  ----------  ------------
<S>                                                       <C>         <C>           <C>         <C>         <C>
1997....................................................  $  137,942  $    365,677  $  138,585  $  189,969  $    832,173
1998....................................................      98,898       171,020     144,731      77,269       491,918
1999....................................................      56,784       133,350      52,851       3,653       246,638
2000....................................................      56,784       135,572      22,224      --           214,580
2001....................................................      56,784       138,684       5,556      --           201,024
Thereafter..............................................      42,588       219,583      --          --           262,171
                                                          ----------  ------------  ----------  ----------  ------------
                                                          $  449,780  $  1,163,886  $  363,947  $  270,891  $  2,248,504
                                                          ----------  ------------  ----------  ----------  ------------
                                                          ----------  ------------  ----------  ----------  ------------
</TABLE>
 
                                      F-15
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
    Total rent expense is as follows:
 
<TABLE>
<CAPTION>
                                                                                                 SIX MONTHS
                                                           YEARS ENDED DECEMBER 31,            ENDED JUNE 30,
                                                     ------------------------------------  ----------------------
                                                        1994        1995         1996         1996        1997
                                                     ----------  ----------  ------------  ----------  ----------
<S>                                                  <C>         <C>         <C>           <C>         <C>
Minimum rentals....................................  $  536,862  $  344,047  $    773,987  $  388,595  $  422,108
Other lease costs..................................     397,705     566,533       459,823     214,484     254,724
                                                     ----------  ----------  ------------  ----------  ----------
                                                     $  934,567  $  910,580  $  1,233,810  $  603,079  $  676,832
                                                     ----------  ----------  ------------  ----------  ----------
                                                     ----------  ----------  ------------  ----------  ----------
</TABLE>
 
    During 1990, the Company executed a license agreement for the manufacture
and sale of "sports-wear" under the "BOSS" trademark. This "BOSS" agreement
expires in December 1999 with additional options to extend it through 2004. The
Company may terminate the agreement if certain sales and/or profit levels are
not attained. The agreement provides for certain minimum license fees and
additional license fees of 5% of denim sales and 6% of non-denim sales, as
defined. Total license fees amounted to $2,908,532, $2,753,422, $4,209,750,
$3,305,162 and $3,651,325 for the years ended December 31, 1994, 1995, 1996 and
the six months ended June 30, 1996 and 1997, respectively. The Company executed
certain agreements on September 30, 1997, which upon closing, will allow it to
acquire the BOSS trademark, subject to certain restrictions on foreign
manufacturing and conveyance of the foreign rights to the BOSS brand to a third
party.
 
    The percentage of BOSS sportswear sales to total sales was 65.1%, 66.3%,
72.2%, 69.8% and 73.4% for the years ended December 31, 1994, 1995 and 1996 and
the six months ended June 30, 1996 and 1997, respectively.
 
    In September 1993, the Company purchased a license to manufacture and sell
certain apparel under the Beverly Hills Polo Club trademark. The agreement was
amended in 1996 and expires in December 1998, with options to extend through
2004. The licensor may terminate the agreement if the Company does not meet
minimum sales requirements as set forth in the agreement. The agreement provides
for minimum annual license fees or license fees of 5% of sales whichever is
greater. Also, the Company is required to spend 1% of annual sales on product
advertising. The license fees were $103,661, $421,234, $607,287, $273,122 and
$600,356 for the years ended December 31, 1994, 1995, 1996 and the six months
ended June 30, 1996 and 1997, respectively.
 
    In 1996, Isaacs Europe executed an exclusive license for the manufacture and
sale, in Europe, of sportswear under the Beverly Hills Polo Club trademark. The
license agreement has an initial term of three years with three one-year renewal
options. The agreement provides for minimum annual license fees, beginning in
the second year, or 6% of sales whichever is greater.
 
                                      F-16
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
    The minimum license fees under the Beverly Hills Polo Club agreement are as
follows:
 
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
----------------------------------------------------------------------------------
<S>                                                                                 <C>
1997..............................................................................  $  112,500
1998..............................................................................     330,000
1999..............................................................................     360,000
                                                                                    ----------
                                                                                    $  802,500
                                                                                    ----------
                                                                                    ----------
</TABLE>
 
    In February 1993, suit was filed against the licensor of the "BOSS"
trademark in the United States and several licensees, including the Company. The
complaint alleges trademark infringement related to use of the "BOSS" trademark.
However, the complaint does not challenge the exclusive right of the Company to
use the "BOSS" trademark in connection with the manufacture and sale of certain
clothing as set forth in its exclusive license agreement.
 
    The Company executed certain agreements on September 30, 1997, which upon
closing will result in settlement of the BOSS trademark litigation described
above. This settlement will allow the Company to acquire the BOSS trademark for
use in the manufacture and sale of apparel, subject to certain restrictions as
set forth in the agreements, and the Company's transfer of the BOSS foreign
rights to a third party. The Company also entered into a foreign rights
manufacturing agreement with the third party under which the Company will be
licensed to manufacture apparel in foreign countries in which the Company is
currently manufacturing BOSS products for sale in the United States and Puerto
Rico. Under the foreign rights agreement, the Company will pay royalties based
on a specified percentage of net sales attributable to apparel manufactured
worldwide and will be subject to an annual net sales requirement. To the extent
that the Company does not achieve the net sales requirements, it will have the
right, in order to avoid termination of the foreign rights agreement, to pay
royalties as if it had achieved such net sales requirement. The foreign rights
agreement has an initial term of four years but may be extended at the Company's
option through December 31, 2007. The BOSS trademark is subject to an option to
purchase from the Company under conditions set forth in the agreements.
 
    The Company is party to employment agreements with five executive officers
which provide for specified levels of compensation and certain other benefits.
The agreements also provide for severance payments from the termination date
through the expiration date under certain circumstances.
 
6. RETIREMENT PLAN
 
    The Company sponsors a defined benefit pension plan that covers
substantially all employees with more than one year of service. The Company's
policy is to fund pension costs accrued. Contributions to the plan reflect
benefits attributed to employees' service to date, as well as service expected
to be earned in the future. The benefits are based on the number of years of
service and the employee's compensation during the three consecutive complete
years of service prior to or including the year of termination of employment.
Plan assets consist primarily of common stocks, fixed income securities and
cash. The latest available actuarial valuation is as of December 31, 1996.
 
                                      F-17
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
6. RETIREMENT PLAN (CONTINUED)
    Pension expense for the years ended December 31, 1994, 1995 and 1996 and the
six months ended June 30, 1996 and June 30, 1997 was $305,000, $310,000,
$284,000, $182,000 and $165,000, respectively. The components of pension expense
for the last three years are as follows:
 
<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                           ----------------------------------
<S>                                                        <C>         <C>         <C>
                                                              1994        1995        1996
                                                           ----------  ----------  ----------
Service cost of current period...........................  $  244,000  $  223,000  $  208,000
Interest on the projected benefit obligation.............     470,000     485,000     555,000
Return on plan assets....................................    (456,000)   (445,000)   (526,000)
Net other costs..........................................      47,000      47,000      47,000
                                                           ----------  ----------  ----------
Pension cost.............................................  $  305,000  $  310,000  $  284,000
                                                           ----------  ----------  ----------
                                                           ----------  ----------  ----------
</TABLE>
 
    The following table sets forth the Plan's funded status and amounts
recognized at December 31, 1995 and 1996:
 
<TABLE>
<CAPTION>
                                                                        1995          1996
                                                                    ------------  ------------
<S>                                                                 <C>           <C>
Vested benefits...................................................  $  5,987,000  $  6,730,000
Nonvested benefits................................................        37,000        56,000
                                                                    ------------  ------------
Accumulated benefit obligation....................................     6,024,000     6,786,000
Effect of anticipated future compensation levels and other
  events..........................................................       457,000       862,000
                                                                    ------------  ------------
Projected benefit obligation......................................     6,481,000     7,648,000
Fair value of assets held in the plan.............................     6,139,000     7,357,000
                                                                    ------------  ------------
Excess of projected benefit obligation over plan assets...........      (342,000)     (291,000)
Unrecognized net loss from past experience different from that
  assumed.........................................................       344,000       661,000
Unrecognized prior service cost...................................       159,000       143,000
Unamortized liability at transition...............................       155,000       124,000
                                                                    ------------  ------------
Net prepaid periodic pension cost.................................  $    316,000  $    637,000
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
    With respect to the above table, the weighted average discount rate used to
measure the projected benefit obligation was 8.0%; the rate of increase in
future compensation levels was 3.0%; and the expected long-term rate of return
on assets was 8.0%.
 
7. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
    Cash paid for interest amounted to $1,192,040, $1,272,794, $1,389,023,
$961,864 and $668,096 for the years ended December 31, 1994, 1995, 1996 and the
six months ended June 30, 1996 and 1997, respectively.
 
    During 1994 and 1995 the Company purchased property and equipment totalling
$731,792 and $316,245, respectively, by issuing notes payable.
 
                                      F-18
<PAGE>
                          I.C. ISAACS & COMPANY, INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                  (INFORMATION AS OF JUNE 30, 1997 AND FOR THE
             SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED)
 
8. NON-RECURRING INCOME
 
    During 1991, the Company received $6.0 million under the provisions of a
settlement agreement related to termination of a license. Additionally, the
agreement provided that, if certain conditions are met, the Company could
receive up to $3.0 million through 1998. The Company had received the maximum
amount allowable under this agreement as of December 31, 1994. Included in other
income for 1994 are payments of approximately $1.18 million.
 
9. COMMON AND PREFERRED STOCK
 
    In May 1997, the Board of Directors of ICI authorized the filing of a
registration statement for an initial public offering of the Company's common
stock.
 
    In May 1997, the stockholders approved an amended and restated Certificate
of Incorporation which increased the authorized common shares from 20,000 to
50.0 million and established a class of preferred shares with 5.0 million shares
authorized. On September 24, 1997, the Board of Directors of ICI approved a
370.4847-for-1 stock split of the common stock, which will be paid in the form
of a stock dividend to the stockholders effective September 24, 1997. The change
in the Company's common stock for the stock dividend has been given retroactive
effect for all periods presented.
 
    In May 1997, the Company adopted the 1997 Omnibus Stock Plan (the "Plan").
Under the Plan, the Company may grant qualified and nonqualified stock options,
stock appreciation rights, restricted stock or performance awards, payable in
cash or shares of common stock, to selected employees. The Plan will be
administered by the Board of Directors. The Company has reserved 500,000 shares
of common stock for issuance under the Plan.
 
                                      F-19
<PAGE>
-------------------------------------------
                                     -------------------------------------------
-------------------------------------------
                                     -------------------------------------------
 
    NO DEALER, SALES PERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
                            ------------------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                    PAGE
                                                    -----
<S>                                              <C>
Prospectus Summary.............................           3
Risk Factors...................................           7
Company Organization...........................          12
Use of Proceeds................................          13
Dividend Policy................................          14
Capitalization.................................          15
Dilution.......................................          16
Selected Financial Data........................          17
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...................................          18
Business.......................................          26
Management.....................................          41
Certain Transactions...........................          46
Principal Stockholders.........................          47
Shares Eligible for Future Sale................          48
Description of Capital Stock...................          49
Underwriting...................................          51
Legal Matters..................................          52
Experts........................................          52
Additional Information.........................          53
Index to Financial Statements..................         F-1
</TABLE>
 
                           --------------------------
 
    UNTIL __________, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
 
                                3,800,000 SHARES
 
                          I.C. ISAACS & COMPANY, INC.
 
                                     [LOGO]
 
                                  COMMON STOCK
 
                             ---------------------
 
                                   PROSPECTUS
 
                             ---------------------
 
                         The Robinson-Humphrey Company
 
                             Legg Mason Wood Walker
                                  Incorporated
 
                                          , 1997
 
-------------------------------------------
                                     -------------------------------------------
-------------------------------------------
                                     -------------------------------------------
<PAGE>
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
    The following table sets forth the expenses in connection with this
Registration Statement. The Company will pay all expenses of the Offering. All
of such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission, NASD and Nasdaq.
 
<TABLE>
<S>                                                                                  <C>
Securities and Exchange Commission Filing Fee......................................  $  18,591
NASD Filing Fee....................................................................      6,618
Nasdaq Listing Fee.................................................................     43,425
Printing and Engraving Fees and Expenses...........................................          *
Legal Fees and Expenses............................................................          *
Accounting Fees and Expenses.......................................................          *
Blue Sky Fees and Expenses.........................................................          *
Transfer Agent Fees................................................................          *
Miscellaneous......................................................................          *
        TOTAL......................................................................          *
</TABLE>
 
------------------------
 
*  To be completed in an amendment.
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
    Pursuant to Section 145 of the General Corporation Law of Delaware (the
"Delaware Corporation Law"), Article IX of the Restated By-laws of the
Registrant, a copy of which is filed as Exhibit 3.02 to this Registration
Statement, provides that the Registrant shall indemnify any person in connection
with any threatened, pending or completed legal proceeding (other than a legal
proceeding by or in the right of the Registrant) by reason of the fact that he
is or was a director, officer, employee or agent of the Registrant or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such legal proceeding if he acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
Registrant, and with respect to any criminal action or proceeding, if he has no
reasonable cause to believe that his conduct was unlawful. If the legal
proceeding is by or in the right of the Registrant, the director or officer may
be indemnified by the Registrant against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
actually and reasonably incurred in connection with the defense or settlement of
such legal proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Registrant and
believed to be in or not opposed to the best interest of the Registrant and
except that he may not be indemnified in respect of any claim, issue or matter
as to which he shall have been adjudged to be liable to the Registrant unless a
court determines otherwise.
 
    Article IX of the Registrant's Restated By-laws also allows the Registrant
to maintain liability insurance on behalf of any person who is or was a
director, officer, employee or agent of the Registrant or such person who serves
or served as director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise at the request of the
Registrant.
 
    Pursuant to Section 102(b)(7) of the Delaware Corporation Law, Article VII
of the Restated Certificate of the Registrant, a copy of which is filed with
Exhibit 3.1 to this Registration Statement, provides that no director of the
Registrant shall be personally liable to the Registrant or its stockholders for
monetary damages for any breach of his fiduciary duty as a director; provided,
however, that such
 
                                      II-1
<PAGE>
clause shall not apply to any liability of a director (1) for any breach of his
loyalty to the Registrant or its stockholders, (2) for acts or omissions that
are not in good faith or involve intentional misconduct or a knowing violation
of the law, (3) under Section 174 of the Delaware Corporation Law, or (4) for
any transaction from which the director derived an improper personal benefit.
 
    The form of Underwriting Agreement, filed as Exhibit 1.01 hereto, contains
provisions by which the Underwriters will agree to indemnify the Registrant and
each officer, director and controlling person of the Registrant against certain
liabilities.
 
    The Form of Indemnification Agreement, filed as Exhibit 10.09 hereto,
contains provisions by which the Registrant will agree to indemnify each of its
officers and directors against certain liabilities.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
 
    In January 1997, the Company issued 37,048 shares of Common Stock to Thomas
P. Ormandy, an executive officer of the Company, for $39,485 cash.
 
    In June 1997, the Company issued 8,619 shares of Common Stock to existing
stockholders of the Company in consideration of the cancellation of stock
certificates that had been issued at a time when the Company did not have a
sufficient number of authorized shares of Common Stock.
 
    Immediately prior to the consummation of the Offering the Company will
effect a 370.4847-for-1 stock split pursuant to which it will issue an aggregate
of approximately 6.0 million shares of Common Stock to the Company's existing
stockholders. See "Company Organization."
 
    Each of the foregoing transactions was exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in reliance on Section 3(a)(9) and/or Section 4(2) of the Securities Act on the
basis that such transaction was solely with existing security holders and/or did
not involve a public offering. No underwriters were involved in connection with
any of the foregoing transactions.
 
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS:
 
<TABLE>
<CAPTION>
EXHIBIT NO                                             DESCRIPTION
-----------  ------------------------------------------------------------------------------------------------
<C>          <S>
      *1.01  Form of Underwriting Agreement
       3.01  Amended and Restated Certificate of Incorporation
       3.02  Amended and Restated By-laws
       4.01  Specimen Common Stock Certificate
       5.01  Opinion of Piper & Marbury L.L.P.
      10.01  Form of Amended and Restated Shareholders' Agreement
      10.02  Employment Agreement dated as of May 15, 1997, between the Registrant and Robert J. Arnot
      10.03  Employment Agreement dated as of May 15, 1997, between the Registrant and Gerald W. Lear
      10.04  Employment Agreement dated as of May 15, 1997, between the Registrant and Gary B. Brashers
      10.05  Employment Agreement dated as of May 15, 1997, between the Registrant and Eugene C. Wielepski
      10.06  Employment Agreement dated as of May 15, 1997, between the Registrant and Thomas Ormandy
      10.07  1997 Omnibus Stock Plan
      10.08(a) Accounts Financing Agreement dated June 16, 1992
      10.08(b) Covenant Supplement to Accounts Financing Agreement dated June 16, 1992
      10.08(c) Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement dated June
             16, 1992
      10.08(d) Trade Financing Agreement Supplement to Accounts Financing Agreement (Security Agreement) dated
             June 16, 1992
</TABLE>
 
                                      II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO                                             DESCRIPTION
-----------  ------------------------------------------------------------------------------------------------
      10.08(e) Amendment to Financing Agreements dated October 30, 1992
<C>          <S>
      10.08(f) Second Amendment to Financing Agreements dated January 4, 1993
      10.08(g) Third Amendment to Financing Agreements dated March 10, 1993
      10.08(h) Fourth Amendment to Financing Agreements dated May 1, 1993
      10.08(i) Fifth Amendment to Financing Agreements dated January 1, 1994
      10.08(j) Sixth Amendment to Financing Agreements dated September 1, 1993
      10.08(k) Seventh Amendment to Financing Agreements dated August   , 1994
      10.08(l) Eighth Amendment to Financing Agreements dated December 31, 1994
      10.08(m) Ninth Amendment to Financing Agreements dated April   , 1995
      10.08(n) Tenth Amendment to Financing Agreements dated June 23, 1995
      10.08(o) Eleventh Amendment to Financing Agreements dated January 1, 1996
      10.08(p) Twelfth Amendment to Financing Agreements dated June 25, 1996
      10.08(q) Thirteenth Amendment to Financing Agreements dated August   , 1996
      10.08(r) Term Promissory Note dated June   , 1996
      10.08(s) Trademark Collateral Assignment and Security Agreement dated June 16, 1992
      10.09  Form of Indemnification Agreement
    **10.10  BOSS Master License Agreement dated September 30, 1997
   **+10.11  BOSS Manufacturing Rights Agreement dated September 30, 1997
    **10.12  Beverly Hills Polo Club Exclusive Domestic License Agreement dated December 14, 1995
    **10.13  Beverly Hills Polo Club Amendment to Exclusive License Agreement (Men's) dated June 3, 1997
    **10.14  Beverly Hills Polo Club Exclusive Domestic License Agreement dated June 1, 1993
    **10.15  Beverly Hills Polo Club Assignment of Licenses (Women's) dated August 31, 1993
    **10.16  Beverly Hills Polo Club Amendment (Women's) dated September 1, 1993
    **10.17  Beverly Hills Polo Club Amendment to Exclusive License Agreement (Women's) dated June 3, 1997
     *10.18  Amendment to License Agreement
      10.19  Beverly Hills Polo Club Amendment to Exclusive License Agreement (Men's) dated July 29, 1997
    **10.20  Beverly Hills Polo Club International Exclusive License Agreement (Wholesale) dated August 15,
             1996
    **10.21  Beverly Hills Polo Club Amendment to Exclusive License Agreement (Wholesale) dated June 3, 1997
    **10.22  Beverly Hills Polo Club International Exclusive License Agreement (Retail) dated August 15, 1996
      10.23  Beverly Hills Polo Club Amendment to Exclusive License Agreement (Retail) dated June 3, 1997
      10.24  Beverly Hills Polo Club Amendment to Exclusive License Agreement dated July 29, 1997
      21.01  List of Subsidiaries
      23.01  Consent of BDO Seidman, LLP
      23.02  Consent of Piper & Marbury L.L.P. (included in Exhibit 5.01)
      24.01  Power of Attorney (included on signature pages hereto)
</TABLE>
 
------------------------
*   To be filed by amendment.
**  Certain portions of this exhibit have been omitted pursuant to a request for
    confidential treatment and have been filed separately with the Securities
    and Exchange Commission.
+   Certain portions of this exhibit have not yet been finalized and will be
    filed by amendment.
 
(B) FINANCIAL STATEMENT SCHEDULES:
 
<TABLE>
<CAPTION>
SCHEDULE
 NUMBER                                     DESCRIPTION                                     PAGE NO.
---------  -----------------------------------------------------------------------------  -------------
<S>        <C>                                                                            <C>
II         Valuation and Qualifying Accounts                                                   S-2
</TABLE>
 
                                      II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
 
    Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions
described in this Registration Statement or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling persons of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
 
    The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement (filed herewith as
Exhibit 1.01) certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.
 
    The undersigned registrant hereby undertakes that:
 
        (1) For purposes of determining any liability under the Securities Act,
    the information omitted from the form of prospectus filed as part of this
    Registration Statement in reliance upon Rule 430A and contained in a form of
    prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
    497(h) under the Securities Act shall be deemed to be part of this
    Registration Statement as of the time it was declared effective.
 
        (2) For the purpose of determining any liability under the Securities
    Act, each post-effective amendment that contains a form of prospectus shall
    be deemed to be a new registration statement relating to the securities
    offered therein, and the offering of such securities at that time shall be
    deemed to be the initial bona fide offering thereof.
 
                                      II-4
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Baltimore, Maryland on this 3rd day
of October, 1997.
 
                                I.C. ISAACS & COMPANY, INC.
 
                                By:             /s/ ROBERT J. ARNOT
                                     -----------------------------------------
                                                  Robert J. Arnot
                                               Chairman of the Board
                                           and Co-Chief Executive Officer
 
    Know all men by these presents, that each person whose signature appears
below constitutes and appoints Robert J. Arnot, Gerald W. Lear and Eugene C.
Wielepski (with full power to each of them to act alone) as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead in any and all capacities to sign any or all amendments or
post-effective amendments to this Registration Statement, including amendments
made pursuant to Rule 462 under the Securities Act of 1933, as amended, and to
file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, to sign any and all
applications, registration statements, notices or other document necessary or
advisable to comply with the applicable state securities laws, and to file the
same, together with all other documents in connection therewith, with the
appropriate state securities authorities, granting unto said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, thereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
 
    Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
 
          SIGNATURE                       TITLE                    DATE
------------------------------  --------------------------  -------------------
 
/s/ ROBERT J. ARNOT             Chairman of the Board and     October 3, 1997
------------------------------  Co-Chief Executive Officer
Robert J. Arnot                 and Director (Principal
                                Executive Officer)
 
/s/ GERALD W. LEAR              President and Co-Chief        October 3, 1997
------------------------------  Executive Officer and
Gerald W. Lear                  Director (Principal
                                Executive Officer)
 
                                      II-5
<PAGE>
 
          SIGNATURE                       TITLE                    DATE
------------------------------  --------------------------  -------------------
 
/s/ EUGENE C. WIELEPSKI         Vice President and Chief      October 3, 1997
------------------------------  Financial Officer and
Eugene C. Wielepski             Director (Principal
                                Financial and Accounting
                                Officer)
 
/s/ GARY B. BRASHERS            Director                      October 3, 1997
------------------------------
Gary B. Brashers
 
/s/ IRA J. HECHLER              Director                      October 3, 1997
------------------------------
Ira J. Hechler
 
/s/ JON HECHLER                 Director                      October 3, 1997
------------------------------
Jon Hechler
 
/s/ RONALD S. SCHMIDT           Director                      October 3, 1997
------------------------------
Ronald S. Schmidt
 
                                      II-6
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                        ON FINANCIAL STATEMENT SCHEDULE
 
    I.C. Isaacs & Company, Inc.
 
    The audits referred to in our report to I.C. Isaacs & Company, Inc., dated
March 31, 1997, except for Note 9 the dates of which are May 15, 1997 and
September 24, 1997, and Note 5 the date of which is September 30, 1997, which is
contained in the Prospectus constituting part of this Registration Statement,
included the audit of the financial statement schedule listed in the
accompanying index for each of the three years in the period ended December 31,
1996. This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statement schedule based upon our audits.
 
    In our opinion, such schedule presents fairly, in all material respects, the
information set forth therein.
 
                                  /s/ BDO Seidman, LLP
 
Washington, D.C.
 
March 31, 1997
 
                                      S-1
<PAGE>
                                                                     SCHEDULE II
 
                          I.C. ISAACS & COMPANY, INC.
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                       CHARGED
                                                                       BALANCE AT     TO COSTS                  BALANCE AT
                                                                        BEGINNING        AND                        END
DESCRIPTION                                                              OF YEAR      EXPENSES     DEDUCTION      OF YEAR
--------------------------------------------------------------------  -------------  -----------  -----------  -------------
<S>                                                                   <C>            <C>          <C>          <C>
Year ended December 31, 1994
  Allowance for doubtful accounts...................................    $     500     $     278    $    (428)    $     350
 
  Reserve for sales returns and discounts...........................    $     382     $   5,546    $  (5,483)    $     445
 
Year ended December 31, 1995
  Allowance for doubtful accounts...................................    $     350     $     398    $    (398)    $     350
 
  Reserve for sales returns and discounts...........................    $     445     $   5,104    $  (5,062)    $     487
 
Year ended December 31, 1996
  Allowance for doubtful accounts...................................    $     350     $   1,194    $    (884)    $     660
 
  Reserve for sales returns and discounts...........................    $     487     $   5,956    $  (5,718)    $     725
</TABLE>
 
                                      S-2
