Schedule 14A
                                 (Rule 14a-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the registrant |X|
Filed by a party other than the registrant |_|

Check the appropriate box:

|X|  Preliminary Proxy Statement    |_|  Confidential, For Use of the Commission
                                         Only (as permitted by Rule 14a-6(e)(2))
|_|  Definitive Proxy Statement
|_|  Definitive Additional Materials
|_|  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

                                 Candie's, Inc.
                (Name of Registrant as Specified in Its Charter)


    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X|  No fee required

|_|  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

     (1)  Title of each class of securities to which transaction applies:

     (2)  Aggregate number of securities to which transaction applies:

     (3)  Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined):

     (4)  Proposed maximum aggregate value of transaction:

     (5)  Total fee paid:

|_|  Fee paid previously with preliminary materials.

|_|  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the form or schedule and the date of its filing.

     (1)  Amount previously paid:

     (2)  Form, Schedule or Registration Statement No.:

     (3)  Filing Party:

     (4)  Date Filed:







                                 CANDIE'S, INC.
                               400 Columbus Avenue
                          Valhalla, New York 10595-1335


                                                                    May 28, 2002


Dear Fellow Stockholders:

     You are  cordially  invited to attend the  Annual  Meeting of  Stockholders
which will be held on Monday, June 24, 2002, at 10:00 A.M., at the New York City
offices of the Company, 215 West 40th Street, New York, New York 10018.

     The Notice of Annual Meeting and Proxy  Statement,  which follow,  describe
the business to be conducted at the meeting.

     Whether or not you plan to attend the  meeting in person,  it is  important
that your shares be represented and voted.  After reading the enclosed Notice of
Annual Meeting and Proxy Statement,  please complete, sign, date and return your
proxy card in the envelope provided. If the address on the accompanying material
is incorrect,  please advise our Transfer  Agent,  Continental  Stock Transfer &
Trust Company, in writing, at 17 Battery Place, New York, New York 10004.

     Your vote is very important, and we will appreciate a prompt return of your
signed proxy card. We hope to see you at the meeting.

                                   Cordially,


                                   Neil Cole
                                   Chairman of the Board,
                                   President and
                                   Chief Executive Officer






PRELIMINARY COPIES
                                 CANDIE'S, INC.
                               400 Columbus Avenue
                          Valhalla, New York 10595-1335
--------------------------------------------------------------------------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON JUNE 24, 2002
--------------------------------------------------------------------------------

To the Stockholders of CANDIE'S, INC.:

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Candie's,
Inc. (the "Company") will be held on Monday, June 24, 2002, at 10:00 A.M. at the
Company's  New York City  offices at 215 West 40th  Street,  New York,  New York
10018, for the following purposes:

     1.   To elect six directors to hold office until the next Annual Meeting of
          Stockholders  and until  their  respective  successors  have been duly
          elected and qualified;

     2.   To consider and vote upon a proposal to an amendment to the  Company's
          Certificate of Incorporation  to increase the authorized  common stock
          from 30,000,000 to 75,000,000 shares;

     3.   To approve the Company's 2002 Stock Option Plan;

     4.   To  ratify  the  appointment  of BDO  Seidman,  LLP  as the  Company's
          independent auditors for the fiscal year ending January 31, 2003; and

     5.   To  transact  such other  business  as may  properly  come  before the
          meeting or any adjournment or adjournments thereof.

     Only  stockholders  of record at the close of  business on May 24, 2002 are
entitled  to notice of and to vote at the  Annual  Meeting  or any  adjournments
thereof.

                                   By Order of the Board of Directors,

                                   Neil Cole
                                   Chairman of the Board, President
                                   and Chief Executive Officer

May 28, 2002
--------------------------------------------------------------------------------

IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING:
       -- ---

PLEASE FILL IN, DATE,  SIGN AND RETURN THE  ENCLOSED  PROXY CARD IN THE ENVELOPE
PROVIDED  FOR THAT  PURPOSE,  WHICH  REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.  THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE,  AND IF YOU ARE
PRESENT AT THE MEETING YOU MAY, IF YOU WISH,  REVOKE YOUR PROXY AT THAT TIME AND
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.






PRELIMINARY COPIES              PROXY STATEMENT

                                 CANDIE'S, INC.

                         ANNUAL MEETING OF STOCKHOLDERS

                           TO BE HELD ON JUNE 24, 2002


     This proxy  statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors of CANDIE'S,  INC. (the  "Company") for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held on June 24,
2002,  including any adjournment or adjournments  thereof,  for the purposes set
forth in the accompanying Notice of Meeting.

     Management  intends to mail this proxy statement and the accompanying  form
of proxy to stockholders on or about May 29, 2002.

     Proxies  in the  accompanying  form,  duly  executed  and  returned  to the
management of the Company and not revoked,  will be voted at the Annual Meeting.
Any proxy given pursuant to such  solicitation may be revoked by the stockholder
at any time prior to the voting of the proxy by a subsequently  dated proxy,  by
written  notification  to  the  Secretary  of  the  Company,  or  by  personally
withdrawing the proxy at the meeting and voting in person.

     The address and telephone number of the principal  executive offices of the
Company are:

                                    400 Columbus Avenue
                                    Valhalla, New York 10595-1335
                                    Telephone No.: (914) 769-8600

                       OUTSTANDING STOCK AND VOTING RIGHTS

     Only  stockholders  of record at the close of business on May 24, 2002 (the
"Record Date") are entitled to notice of and to vote at the Annual  Meeting.  As
of the Record Date, there were issued and outstanding  23,916,139  shares of the
Company's  common  stock,  $.001 par value per share (the "Common  Stock"),  the
Company's only class of voting  securities.  Each share of Common Stock entitles
the holder to one vote on each matter submitted to a vote at the Annual Meeting.


                                VOTING PROCEDURES

     The directors will be elected by the  affirmative  vote of the holders of a
plurality  of the shares of Common  Stock  present in person or  represented  by
proxy at the Annual  Meeting,  provided  a quorum is  present.  Approval  of the
Amendment  to  the  Company's  Certificate  of  Incorporation  to  increase  its
authorized  Common  Stock  requires  the  affirmative  vote  of the  issued  and
outstanding  shares of Common Stock as of the Record Date.  All other matters at
the Annual  Meeting,  including  approval of the adoption of the Company's  2002
Stock Option Plan and ratification of the appointment of BDO Seidman, LLP as the
Company's independent auditors for its fiscal year ending January 31, 2003, will
be decided by the affirmative vote of the holders of a majority of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting and
entitled  to vote on the  matter,  provided  a quorum  is  present.  A quorum is
present if at least a majority of the shares of Common Stock  outstanding  as of
the  Record  Date are  present in person or  represented  by proxy at the Annual
Meeting.  Votes will be  counted  and  certified  by one or more  Inspectors  of
Election who are expected to be employees  of the Company.  In  accordance  with
Delaware law,  abstentions and "broker non-votes" (i.e., proxies from brokers or
nominees  indicating that such persons have not received  instructions  from the
beneficial  owner or other  person  entitled  to vote shares as to a matter with
respect to which the  brokers or  nominees  do not have  discretionary  power to
vote) will be treated as present for purposes of  determining  the presence of a
quorum.  For  purposes  of  determining  approval of a matter  presented  at the
meeting,  abstentions  will be deemed  present  and  entitled  to vote and will,
therefore,  have the same legal effect as a vote "against" a matter presented at
the meeting. Broker non-votes will be deemed not entitled to vote on the subject
matter as to which the non-vote is indicated and will, therefore,  have no legal
effect on the vote on that particular  matter.  However,  because of the need to
obtain the affirmative vote of the majority of the outstanding  shares of Common
Stock,  failures to vote,  broker  non-votes and abstentions  will have the same
practical  effect  as a  vote  against  the  proposal  to  amend  the  Company's
Certificate of Incorporation to increase the authorized shares of Common Stock.

     Proxies will be voted in accordance with the instructions  thereon.  Unless
otherwise stated, all shares represented by a proxy will be voted as instructed.
Proxies may be revoked as noted above.

                              ELECTION OF DIRECTORS

     At the Annual Meeting, six (6) directors will be elected to hold office for
a term expiring at the 2002 Annual Meeting of  Stockholders.  Each director will
be elected to serve until a  successor  is elected  and  qualified  or until the
director's earlier resignation or removal.

     At the  Annual  Meeting,  proxies  granted  by  stockholders  will be voted
individually  for the  election,  as directors  of the  Company,  of the persons
listed below,  unless a proxy specifies that it is not to be voted in favor of a
nominee for director. In the event any of the nominees listed below is unable to
serve,  it is intended  that the proxy will be voted for such other  nominees as
are designated by the Board of Directors.  Each of the persons named below,  who
are presently members of the Company's Board of Directors,  has indicated to the
Board of Directors of the Company that he or she will be available to serve.

Name                         Age           Position
----                         ---           --------
Neil Cole                     45           Chairman of the Board,
                                           President and Chief Executive Officer
Barry Emanuel                 60           Director
Steven Mendelow               59           Director
Peter Siris                   57           Director
Ann Iverson                   58           Director
Hubert Guez                   49           Director

     Neil Cole has been  Chairman of the Board,  President  and Chief  Executive
Officer of the Company  since  February 23, 1993.  Mr.  Cole's  family began the
Candie's  business in the late  1970's.  After the brand was sold by the family,
Mr. Cole  re-purchased  the brand and founded the Company in 1992. From February
through April 1992, Mr. Cole served as a director and as acting President of the
Company. Mr. Cole also served as Chairman of the Board, President, Treasurer and
a director of New Retail  Concepts,  Inc.  ("NRC"),  from its  inception in 1986
until it was merged  with and into the  Company in August  1998.  Mr. Cole is an
attorney who graduated from Hofstra law school in 1982.

     Barry Emanuel has been a director of the Company  since May 1993.  For more
than the  past  five  years,  Mr.  Emanuel  has  served  as  President  of Copen
Associates, Inc., a textile manufacturer located in New York, New York.

     Steven  Mendelow has been a director of the Company since December 1999 and
has been a principal with the accounting  firm of Konigsberg  Wolf & Co. and its
predecessor,  which is located in New York, New York,  since 1972. Mr.  Mendelow
was a director  of NRC from April 1, 1992 until NRC merged  into the  Company in
August 1998.

     Peter  Siris has been a director  of the  Company  since March 2000 and has
been active in the apparel,  retail and financial  industries for over 25 years.
During the past two years, Mr. Siris has been the Managing Director of Guerrilla
Capital   Management,   while  completing  his  best  selling  book,   "Guerilla
Investing",  and working as a columnist  for the "New York Daily News".  Between
1995 and 1997, he served as Senior Vice President of Warnaco,  Inc. and Director
of Investor Relations of Authentic Fitness Corporation and Senior Vice President
of ABN-Amro  Incorporated.  Between 1970 and 1995,  Mr. Siris served as Managing
Director of Union Bank of Switzerland,  Securities, Executive Vice President and
Director of The  Buckingham  Research,  Executive Vice President and Director of
Sirco International Corporation, President of MERIC, Inc. and President of Urban
Innovations,  Inc.  Mr.  Siris is a  director  of  Crown  American  Real  Estate
Investment Trust. Mr. Siris, who earned his MBA from Harvard University, is also
an expert on trade in China and authored a novel on that subject,  entitled "The
Peking Mandate".

     Ann Iverson  joined the Board in March 2001.  Since 1998,  she has been the
President and CEO of International  Link, Inc., a consulting  company  providing
value to  corporations  in making  strategic  decisions.  From  June 1995  until
forming  International  Link, Ms. Iverson worked as the Group Chief Executive of
Laura Ashley in the United Kingdom.  Prior to that she was the President and CEO
of KayBee Toy Stores and CEO of Mothercare UK, Ltd based in England. In addition
to being a member of the Company's  board,  Ms.  Iverson  currently  sits on the
board of Owens  Corning,  Inc., a leader in the building  materials  systems and
composites systems industry,  and serves as a member of its Audit Committee.  Ms
Iverson  is also  Chairman  of the Board at Brooks  Sports,  Inc.,  Chairman  of
Portico Bed & Bath Inc.  and a member of the Board of  Trustees  of  Thunderbird
Graduate School of  International  Management.  Ms.  Iverson,  who brings to the
Board over 40 years of experience in the fashion and retail  industry,  has been
the recipient of numerous  industry awards,  including the Ellis Island Medal of
Honor and Retailer of the Year in the United Kingdom.

     Hubert  Guez  joined the Board in April 2002 and has been  involved  in the
apparel industry for over twenty-five years. From October 1998 through May 2002,
Mr.  Guez was the  Vice-Chairman  and  Manager of  Unzipped  Apparel,  LLC,  the
licensee  for  Bongo  brand  apparel.  From  1996 to 1998,  Mr.  Guez  served as
President of Commerce  Clothing  Company,  LLC,  the  licensee  for CK Kids.  In
September,  1991, Mr. Guez founded Azteca Production International,  Inc., where
he continues to serve as the Chief  Executive  Officer and President.  From 1985
through 1991, he was employed with FX Systems,  Inc., a software company that he
founded specializing in operating systems for the apparel industry. Between 1981
and 1985,  Mr. Guez served as  president  of Sasson  Jeans LA, the  licensee for
Sasson women's jeans.

Board Of Directors and Committee Meetings

     During the fiscal year ended January 31, 2002 ("Fiscal 2002"), the Board of
Directors  held six  meetings.  In addition,  the Board took action by unanimous
written  consent  in lieu of  meetings.  The  Company  does not have a  standing
nominating committee of the Board of Directors or a committee performing similar
functions.

     The  Company  has an audit  committee  of the  Board of  Directors  ("Audit
Committee") consisting of Messrs.  Emanuel,  Mendelow and Siris and Ms. Iverson.
Each member of the Audit Committee is an "independent  director" under the rules
of the National  Association of Securities  Dealers,  Inc. The Audit  Committee,
among  other  things,  recommends  the  firm  to  be  appointed  as  independent
accountants to audit the Company's  financial  statements,  reviews  significant
accounting  and  reporting  issues and  developments,  reviews and discusses the
scope and results of each audit with the independent  accountants,  reviews with
management and the independent  accountants  the Company's  interim and year-end
operating results and considers the adequacy of the internal accounting controls
and audit  procedures  of the  Company.  The Audit  Committee  may also  conduct
inquiries  into  the  Company's  operations,   including,   without  limitation,
inquiries  to ensure  compliance  with  applicable  laws,  securities  rules and
regulations and accounting standards.  The Audit Committee has adopted a written
charter,  a copy of which was  attached  as  Appendix A to the  Company's  proxy
statement  filed with the  Securities  and Exchange  Commission  on July 3, 2001
relating to its annual  meeting of  stockholders  held in August 2001. The Audit
Committee held seven meetings during Fiscal 2002.

Compensation Committee Interlocks and Insider Participation

     The Company has a Compensation  Committee of the Board of Directors,  which
is comprised of Messrs. Emanuel,  Mendelow and Siris and Ms. Iverson which makes
recommendations  to the Board of  Directors  regarding  executive  compensation.
During Fiscal 2002,  Mr. Cole, the Company's  Chief  Executive  Officer,  in his
capacity  as a  director,  also  engaged in Board  deliberations  regarding  the
determination of executive officer compensation. During Fiscal 2002, none of the
executive  officers  of the  Company  served  on the board of  directors  or the
compensation committee of any other entity.

Compliance with Section 16(a) of Securities Exchange Act of 1934

     Section  16(a) of  Securities  Exchange  Act of 1934  requires  the Company
officers and directors, and persons who beneficially own more than 10 percent of
a  registered  class  of the  Company  equity  securities,  to file  reports  of
ownership and changes in ownership with the SEC. Officers, directors and greater
than 10 percent  owners are required by certain SEC  regulations  to furnish the
Company with copies of all Section 16(a) forms they file.

     Based solely on the Company's  review of the copies of such forms  received
by it, the Company  believes that during Fiscal 2002 there was  compliance  with
the  filing  requirements   applicable  to  its  officers,   directors  and  10%
stockholders.

                      EXECUTIVE OFFICERS AND KEY EMPLOYEES

     The executive  officers of the Company (Mr.  Cole,  Mr.  Danderline and Ms.
Sorell Stehr),  and key employee (Mr. McPhee),  their positions with the Company
and certain other information, as of the Record Date, are set forth below:

Name                  Age       Position
----                  ---       --------
Neil Cole              45       Chairman of the Board,
                                President and Chief Executive Officer
Richard Danderline     48       Executive Vice President, Finance and Operations
Deborah Sorell Stehr   39       Senior Vice President,
                                Secretary and General Counsel
John McPhee            39       President of Wholesale Sales

     Richard Danderline joined the Company as Executive Vice President,  Finance
and  Operations  in June 2000.  For the  thirteen  years  prior to  joining  the
Company,  he served as Vice President,  Treasurer and Chief Financial Officer of
AeroGroup International,  Inc ("AeroGroup"),  a privately held footwear company.
Prior to joining  AeroGroup,  he served as Vice  President  and Chief  Financial
Officer of Kenneth Cole Productions, Inc., where he was part of a management-led
buyout  of  its  What's  What  division,   which  later  became  AeroGroup.  Mr.
Danderline's  experience also includes  serving as Vice President and Controller
of Energy  Asserts  International,  Inc. and as Vice President and Controller of
XOIL Energy  Resources,  Inc. Mr.  Danderline is certified public accountant who
began his career with Touche Ross & Co.,  the  predecessor  of Deloitte & Touche
LLP.

     Deborah  Sorell Stehr joined the Company in December 1998 as Vice President
and General Counsel, and was promoted to Senior Vice President in November 1999.
From September  1996 to December  1998,  Ms. Sorell Stehr was Associate  General
Counsel with Nine West Group Inc. ("Nine West"), a women's' footwear corporation
with sales  approximating  $2.0  billion,  where Ms.  Sorell Stehr was primarily
responsible for overseeing legal affairs relating to domestic and  international
contracts,   intellectual  property,   licensing,   general  corporate  matters,
litigation and claims.  Prior to joining Nine West,  Ms. Sorell Stehr  practiced
law for nine  years at  private  law firms in New York City and  Chicago  in the
areas of corporate law and commercial litigation.

     John J.  McPhee  joined the  Company in October  1996 as  President  of the
Candie's Kids division.  Mr. McPhee was promoted to President of Wholesale Sales
in March 2000.  From October 1992 to October  1996,  Mr. McPhee was President of
the Children's  Footwear Division of Sam & Libby, Inc. Prior to Sam & Libby, Mr.
McPhee held various executive positions with Jumping-Jacks  Shoes. Mr. McPhee is
a graduate of Santa Clara University.

     All officers serve at the discretion of the Company's Board of Directors.






                             EXECUTIVE COMPENSATION


     The  following  table  sets forth all  compensation  paid or accrued by the
Company for Fiscal 2002,  2001 and 2000, to or for the Chief  Executive  Officer
and for the other  persons  that  served as  executive  officers  of the Company
during Fiscal 2002 whose salaries  exceeded  $100,000 and for John J. McPhee who
is a key employee but not an executive officer of the Company (collectively, the
"Named Persons"):




                                                                         Summary Compensation Table
                                                --------------------------------------------------------------------------
                                                                                                      Long-Term
                                                      Annual Compensation                         Compensation Awards
                                                -----------------------------------   ------------------------------------
                                                                                               Other           Securities
 Name & Principal Positions          Fiscal                                                 Annual Com-        Underlying
                                      Year             Salary              Bonus(1)        pensation (2)         Options
--------------------------------------------------------------------------------------------------------------------------
                                                                                                

Neil Cole                             2002        $      500,000      $           -       $          -           350,000
Chairman, President &                 2001               500,000                  -             10,000           617,250
Chief Executive Officer               2000               500,436                  - (3)         12,500           410,000

Deborah Sorell Stehr                  2002               180,000             25,000                  -            40,000
Senior Vice President &               2001               166,667             25,000                  -            80,000
General Counsel                       2000               132,692             25,000                  -            50,000

Richard Danderline                    2002               214,968             50,000                  -                 -
Executive Vice President -            2001               120,513   (4)       25,000                  -           160,000
Finance & Operations

John McPhee                           2002               275,000                  -                  -           140,000
President of Wholesale Sales          2001               228,642             25,000                  -           110,000
                                      2000               243,284             25,000                  -            50,000


(1)      Represents bonuses accrued under employment agreements.
(2)      Represents amounts earned as director's fees.
(3)      As a result of the Company's restatement of certain financial statements, the $105,500 bonus to Mr. Cole previously
         reported was repaid by Mr. Cole to the Company in Fiscal 2001.
(4)      For the period from June 26, 2000 through January 31, 2001.





Option Grants in Fiscal 2002 Year

         The following table provides information with respect to individual
stock options granted during Fiscal 2002 to each of the Named Persons who
received options during Fiscal 2002:





                              Shares           % of Total                                          Potential Realizable Value
                            Underlying       Options Granted                                         at Assumed Annual Rates
                             Options          to Employees           Exercise     Expiration      of Stock Price Appreciation
  Name                       Granted (1)     in Fiscal Year           Price          Date               for Option Term (2)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                        5%               10%
                                                                                                  ----------------   --------------
                                                                                                    

Neil Cole                            350,000        21.9%            $2.300        10/26/11               $506,260     $1,282,963
Deborah Sorell Stehr                  40,000         2.5              1.700        09/21/11                 42,765        108,374
Richard Danderline                         -          -                  -                -                      -              -
John McPhee                          100,000         7.1              2.125        11/11/06                  4,468         61,287
                                      40,000         2.8              1.700        09/21/11                 42,765        108,374



          (1)  Mr.  Cole's  options  vested in full on  October  26,  2001.  The
               options  granted to Ms. Stehr and the 40,000  options  granted to
               Mr.  McPhee vest as to one-third  on each of September  21, 2001,
               2002 and 2003.

          (2)  The potential  realizable  value columns of the table  illustrate
               values  that  might be  realized  upon  exercise  of the  options
               immediately  prior to their  expiration,  assuming the  Company's
               Common Stock  appreciates at the compounded  rates specified over
               the term of the options.  These  amounts do not take into account
               provisions  of options  providing for  termination  of the option
               following termination of employment or non-transferability of the
               options and do not make any provision for taxes  associated  with
               exercise.  Because  actual  gains will depend  upon,  among other
               things,  future  performance of the Common Stock, there can be no
               assurance  that  the  amounts  reflected  in this  table  will be
               achieved.


     The following  table sets forth  information  as of January 31, 2002,  with
respect to exercised and unexercised stock options held by the Named Persons. No
options  were  exercised by any of the Named  Persons  during  Fiscal  2002.  On
December 11, 2001, 10,000 options owned by Neil Cole expired.

Aggregated Fiscal Year-End Option Values



                                                Number of Securities                            Value of Unexercised
                                               Underlying Unexercised                                In-The-Money
                                            Options at January 31, 2002                     Options at January 31, 2002(1)
                                      ------------------------------------------   -------------------------------------------
              Name                     Exercisable            Unexercisable               Exercisable            Unexercisable
----------------------------------    ------------------   ---------------------   ----------------------   ------------------
                                                                                                         

Neil Cole                              3,091,000                         -              $   771,104                $       -

Deborah Sorell Stehr                     143,333                    56,667                  104,550                    41,400

Richard Danderline                        60,000                   100,000                   52,665                   77,880

John McPhee                              233,333                    66,667                  122,000                   49,500

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

          (1)  An option is  "in-the-money" if the year-end closing market price
               per share of the  Company's  Common  Stock  exceeds the  exercise
               price of such  options.  The closing  market price on January 31,
               2002 was $2.06.


Employment Contracts and Termination and Change-in-Control Arrangements

     In April 2002,  the Company  entered into a new  employment  agreement with
Neil Cole to serve as President and Chief Executive  Officer for a term expiring
on  December  31,  2005,  at an annual base  salary of  $500,000.  Under the new
employment  agreement,  if the Company  meets at least 66 2/3% of its net income
target (as determined by the Board) for the fiscal year, the Company will pay to
Mr. Cole a bonus in an amount equal to his base salary multiplied by a fraction,
the  numerator  of which is the actual net income for such  fiscal  year and the
denominator  of which is the target net income for such  fiscal  year.  Mr. Cole
also  entitled to customary  benefits,  including  participation  in  management
incentive and benefit plans,  reimbursement for automobile expenses,  reasonable
travel and  entertainment  expenses and a life  insurance  policy to benefit Mr.
Cole's  designated  beneficiaries in the amount of $3,000,000,  $4,000,000,  and
$5,000,000,  respectively,  for each year in the term. The employment  agreement
provides  that Mr. Cole would  receive an amount equal to three times his annual
compensation,  plus  accelerated  vesting or payment of  deferred  compensation,
options,  stock appreciation rights or any other benefits payable to Mr. Cole in
the event that within twelve months of a "Change in Control",  as defined in the
agreement,  Mr. Cole is terminated by the Company without "Cause" or if Mr. Cole
terminates  his  agreement for "Good  Reason",  as such terms are defined in his
employment  agreement.  If the Company is sold,  Mr. Cole will receive a payment
equal to 5% of the sale  price in the event  that sale  price is at least $5 per
share or equivalent  with respect to an asset sale.  In connection  with his new
employment  agreement,  Mr. Cole was granted  under one of the  Company's  stock
option plans,  options to purchase  600,000  shares of Common Stock at $2.75 per
share, which options vest over a three year period.

     In  February  2002,  the  Company   entered  into  a  two  year  employment
arrangement with Deborah Sorell Stehr for a term expiring on January 31, 2004 at
a base salary of $225,000  for the first year and  $235,000 for the second year.
Ms.  Sorell  Stehr  is also  eligible  for a  bonus  pursuant  to the  Company's
executive bonus program and to customary  benefits,  including  participation in
management  incentive and benefit plans,  reimbursement for automobile expenses,
reasonable  travel and entertainment  expenses and a life insurance policy.  The
agreement  provides  that Ms. Sorell Stehr would receive an amount equal to $100
less than  three  times her annual  compensation,  plus  accelerated  vesting or
payment of deferred  compensation,  options,  stock  appreciation  rights or any
other  benefits  payable to Ms.  Sorell  Stehr in the event that  within  twelve
months of a "Change in Control",  Ms.  Sorell Stehr is terminated by the Company
without "Cause" or Ms. Sorell Stehr  terminates her agreement for "Good Reason",
as such terms are defined in her employment agreement.

     On or about May 19, 2000, the Company entered into an employment  agreement
with Richard  Danderline for a term expiring on June 26, 2002, at an annual base
salary of $200,000 for the period  ended June 26, 2001,  and $225,000 for the 12
months ended June 26, 2002. Mr.  Danderline is entitled to receive a bonus up to
an amount of $100,000 the first year and $150,000 the second year  calculated as
one half of 1% of the pre-tax  profit of the Company for every 1% that  selling,
general and  administrative  expenses of the Company decrease as a percentage of
revenues  using Fiscal 2001 as the base year,  but in no event less than $50,000
for each year of employment.  In connection with his employment,  Mr. Danderline
received a grant of 150,000  options,  vesting over a period of five years.  Mr.
Danderline is also entitled to customary  benefits,  including  participation in
management  incentive and benefit plans,  reimbursement for automobile expenses,
reasonable travel and entertainment expenses and a life insurance policy. In the
event of a "change in control",  defined as the cessation of Neil Cole being the
Chairman of the Board, or a sale or merger of the Company with a  non-affiliate,
Mr. Danderline `s options vest immediately.

     On or about March 1, 2000, the Company entered into an employment agreement
with John  McPhee for a term  expiring on January  31,  2003,  at an annual base
salary of $200,000  for the two months  ended March 15,  2000,  $225,000 for the
period from March 16, 2000 through January 21, 2001,  $275,000 for the 12 months
ending January 31, 2002, and $325,000 for the 12 months ending January 31, 2003.
Pursuant  to the  employment  agreement,  Mr.  McPhee  serves  as  President  of
Wholesale Sales for the Company devoting  substantially all of his business time
and his best efforts to the business of the Company. Mr. McPhee is also entitled
to an annual bonus during the term of the agreement  equal to one percent of the
Company's  income  before  income  taxes but in no event less than  $25,000  for
Fiscal 2000.  Under the  agreement,  Mr.  McPhee  receives  customary  benefits,
including participation in management incentive and benefit plans, reimbursement
for automobile expenses, reasonable travel and entertainment expenses and a life
insurance policy. Pursuant to the agreement,  Mr. McPhee is entitled to his full
base  salary for one year or through  the term of the  agreement,  whichever  is
greater,  if there is a "Change of Control in the  Company"  or if he leaves the
Company for "Good Reason" as those terms are defined in the agreement.

Compensation of Directors

     During Fiscal 2002,  Messrs.  Emanuel,  Mendelow and Siris and Ms.  Iverson
(each an  "Outside  Director")  each  received a grant of Common  Stock from the
Company under the  Non-Employee  Director Stock Incentive Plan having a value of
$10,000 in compensation for attending board meetings. Each Outside Director also
received $500 for each Committee  meeting that he or she attended.  Each Outside
Director is also entitled to an additional  grant of Common Stock having a value
of $20,000 during Fiscal 2003.

     Under the Company's 2000 Stock Option Plan (the "2000 Plan") and 1997 Stock
Option Plan (the "1997 Plan"), non-employee directors are eligible to be granted
non-qualified stock options.

     The Company's Board of Directors, or the Stock Option Committee of the 2000
Plan or the 1997 Plan,  if one is  appointed,  has  discretion  to determine the
number of shares subject to each non-qualified  option (subject to the number of
shares available for grant under the 2000 Plan or the 1997 Plan, as applicable),
the exercise  price thereof  (provided such price is not less than the par value
of the  underlying  shares of the Company's  Common Stock under the 2000 Plan or
not less than the fair  value of Common  Stock  under the 1997  Plan),  the term
thereof  (but not in  excess  of 10 years  from the date of  grant,  subject  to
earlier  termination  in  certain  circumstances),  and the  manner in which the
option  becomes  exercisable  (amounts,  intervals  and  other  conditions).  No
non-qualified options were granted to non-employee directors under the 2000 Plan
or the 1997 Plan during Fiscal 2002.

Report on Executive Compensation

     Compensation of the Company's executive officers is determined by the Board
of Directors pursuant to recommendations made by the Compensation  Committee and
in accordance with the terms of the respective  employment agreements of certain
executive  officers  in  effect  prior  to the  formation  of  the  Compensation
Committee.  There is no formal  compensation  policy for the Company's executive
officers, other than the employment agreements described above. Compensation for
executive officers consists of base salary, bonus and stock option awards.

     Base Salary. The base salary of the Company's executives are fixed pursuant
to the terms of their  respective  employment  agreements with the Company.  The
Compensation   Committee   reviews  the  salary  of   executive   officers   for
reasonableness   based  on  job   responsibilities   and  a  limited  review  of
compensation  practices for comparable  positions at corporations  which compete
with  the  Company  in its  business  or are of  comparable  size  and  scope of
operations. The Committee's  recommendations to the Board of Directors are based
primarily on informal judgments  reasonably believed to be in the best interests
of the Company.  In  determining  the base  salaries of certain of the Company's
executives  whose  employment  agreements  were up for  renewal,  the  Committee
considered the Company's performance and growth plans.

     Bonuses.  Under a recently  adopted  executive  bonus plan,  the  Committee
determines  bonuses based on the Company's overall  performance,  profitability,
working capital management and other qualitative and quantitative  measurements.
In  determining  the amount of bonuses  awarded,  the  Committee  considers  the
Company's  revenues  and  profitability  for  the  applicable  period  and  each
executive's  contribution to the success of the Company. The Company's executive
officers  received  bonuses  which were deemed  appropriate  based upon existing
employment  agreements  and the Company's  operating  results  during the fiscal
year.

     Stock  Options.  Stock option  awards are  intended to attract,  retain and
motivate  personnel  by  affording  them an  opportunity  to receive  additional
compensation  based upon the performance of the Company's Common Stock. The size
and grant of actual awards is determined by the Committee on an informal  basis.
The  Committee's  determination  as to the size of actual  awards to  individual
executives   is   subjective,   after   taking   into   account   the   relative
responsibilities and contributions of the individual executives.

                           The Compensation Committee:

                                  Barry Emanuel
                                 Steven Mendelow
                                   Peter Siris
                                  Anne Iverson





Stock Performance Graph

     The  following  line graph  compares  from  February 1, 1997 to January 31,
2002, the cumulative total stockholder return on the Company's Common Stock with
the cumulative total return on stocks of companies  comprising the NASDAQ Market
Index and a Peer group  assuming  $100 was  invested  on February 1, 1997 in the
Company's  Common  Stock  and in  each  of the  foregoing  indices  and  assumes
reinvestment of all dividends, if any, paid on such securities.  The Company has
not paid  any  cash  dividends  and,  therefore,  the  cumulative  total  return
calculation  for the Company is based solely upon stock price  appreciation  and
not upon  reinvestment  of cash  dividends.  The Peer Group consists of K-Swiss,
Inc.,  the  Company and Stride Rite  Corporation  which is based upon  companies
classified under the Footwear, except Rubber, Standard Industrial Classification
number.  Historical  stock price is not  necessarily  indicative of future stock
price performance.





                                   --------------------------------------FISCAL YEAR ENDING---------------------------
COMPANY/INDEX/MARKET                1/31/1997    1/31/1998      1/31/1999     1/31/2000       1/31/2001     1/31/2002
                                                                                          

Candie's, Inc.                       $100.00        $95.18         $66.27        $19.28         $21.09         $39.71
SIC Code Index                       $100.00        $99.27         $93.55        $57.98         $84.43         $97.42
NASDAQ Market Index                  $100.00       $117.79        $183.83       $274.99        $196.89        $138.71








                          VOTING SECURITY OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following  table sets forth certain  information as of the Record Date,
based on information  obtained from the persons named below, with respect to the
beneficial  ownership  of shares of Common Stock by (i) each person known by the
Company to be the beneficial owner of more than 5% of the outstanding  shares of
Common  Stock;  (ii)  each of the Named  Persons;  (iii)  each of the  Company's
directors; and (iv) all executive officers and directors as a group:




                                                                  Amount and
                                                                   Nature of                               Percentage of
             Name and Address of                                  Beneficial                                Beneficial
             Beneficial Owner (1)                                Ownership (2)                               Ownership
--------------------------------------------------     ------------------------------   ------------------------------------
                                                                                                       

Neil Cole                                                            3,553,925( 3 )                          13.2%

Claudio Trust dated February 2, 1990                                 1,886,597                                7.9%
2925 Mountain Maple Lane
Jackson, WY 83001

Michael Caruso                                                       1,986,597( 4 )                           8.3%

Barry Emanuel                                                           98,063( 5 )                             *

Steven Mendelow                                                        144,063( 6 )                             *

Deborah Sorell Stehr                                                   133,333( 7 )                             *

Richard Danderline                                                      85,000( 8 )                             *

John McPhee                                                            245,883( 9 )                           1.0%

Peter Siris                                                             79,938( 10)                             *

Ann Iverson                                                             77,938( 11)                             *

Sweet Sportswear, LLC                                                3,000,000( 12)                          12.5%
   Hubert Guez

All executive officers and directors as a                            7,172,260( 3 ) (5) (6) (7)              26.1%
group (eight persons)                                                         (8) (10) (11) (12)




*        Less than 1%

     (1)  Unless  otherwise  indicated,  each beneficial owner has an address at
          400 Columbus Avenue, Valhalla, New York 10595-1335.

     (2)  A person is deemed to have beneficial ownership of securities that can
          be  acquired by such person  within 60 days of the Record  Date,  upon
          exercise of warrants or options. Consequently, each beneficial owner's
          percentage  ownership  is  determined  by  assuming  that  warrants or
          options  held by such person (but not those held by any other  person)
          and which are  exercisable  within 60 days from the  Record  Date have
          been exercised.  Unless otherwise noted, the Company believes that all
          persons referred to in the table have sole voting and investment power
          with respect to all shares of Common Stock  reflected as  beneficially
          owned by them.

     (3)  Includes  3,091,000  shares of Common Stock  issuable upon exercise of
          options  owned by Neil Cole.  Also includes  462,925  shares of Common
          Stock owned by Mr.  Cole's former wife over which Mr. Cole has certain
          voting rights but no rights to dispose of or pecuniary interest.

     (4)  Represents  shares held by Claudio  Trust dated  February 2, 1990,  of
          which Mr. Caruso is the trustee and includes  100,000 shares of Common
          Stock issuable upon exercise of options owned by Michael Caruso.

     (5)  Includes 7,938 shares of Common Stock issued to Mr. Emanuel and 80,125
          shares of Common Stock issuable upon exercise of options.

     (6)  Includes 17,938 shares of Common Stock issued to Mr. Mendelow,  60,750
          shares of Common Stock owned by C&P Associates,  of which Mr. Mendelow
          and his wife  are  affiliated,  and  65,375  shares  of  Common  Stock
          issuable upon exercise of options.

     (7)  Represents shares of Common Stock issuable upon exercise of options.

     (8)  Represents shares of Common Stock issuable upon exercise of options.

     (9)  Represents  228,333  shares of Common Stock  issuable upon exercise of
          options and 17,550 shares of Common Stock owned by Mr. McPhee.

     (10) Includes  7,938  shares of Common Stock  issued to Mr.  Siris,  70,000
          shares of Common  Stock  issuable  upon  exercise of options and 2,000
          shares of Common Stock owned by Mr. Siris' minor daughter.

     (11) Includes 7,938 shares of Common Stock issued to Ms. Iverson and 70,000
          shares of Common Stock issuable upon exercise of options.

     (12) Represents shares of Common Stock held by Sweet  Sportswear,  LLC. Mr.
          Guez, a recently appointed member of the Company's Board of Directors,
          is a managing member of Sweet Sportswear.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During  Fiscal 2002,  the Company  purchased  approximately  $16 million of
footwear  through Redwood Shoe Inc., a company with which Mark Tucker,  a former
director of the Company who resigned as of June 2001, is affiliated. The Company
is no longer purchasing footwear through Redwood Shoe Inc.

     During Fiscal 2002, Neil Cole, Chairman of the Board,  President and CEO of
Candie's, Inc. founded the Candie's Foundation ("the Foundation"),  a charitable
foundation  whose  purpose  is to raise  national  awareness  concerning  to the
problems  of  teenage  pregnancy.  During  the year,  the  Company  advanced  an
aggregate of $1,058,0000 to the Foundation on which interest is being charged at
a rate per annum that is equal to the prime rate,  and at January 31, 2002 had a
balance  due of  $699,000.  The  Company  has  reserved  $350,000  against  this
receivable.  Although the Company believes that the amount due will be recovered
in full,  the  reserve  was  established  because  of the  Foundation's  limited
operating history in fund raising activities.

                             AUDIT COMMITTEE REPORT

     In  January   2002,   the  Audit   Committee   met  with   management   and
representatives  of BDO  Seidman,  LLP to review and  discuss  the audit and the
procedures and timing of the audit.  In April 2002, the Audit Committee met with
management  and  representatives  of BDO Seidman,  LLP to review and discuss the
audited  financial  statements.  The Audit Committee also conducted  discussions
with the Company's independent auditors, BDO Seidman, LLP, regarding the matters
required  by the  Statement  on  Auditing  Standards  No.  61.  As  required  by
Independence Standards Board Standard No. 1, "Independence Discussion with Audit
Committees,"  the Audit  Committee has discussed  with and received the required
written  disclosures and confirming  letter from BDO Seidman,  LLP regarding its
independence  and has discussed with BDO Seidman,  LLP its  independence.  Based
upon  the  review  and  discussions  referred  to  above,  the  Audit  Committee
recommended to the Board of Directors that the audited  financial  statements be
included in the Company's  Annual Report on Form 10-K for the year ended January
31, 2002.

                  The Audit Committee-

                  Barry Emanuel, Ann Iverson, Steven Mendelow, Peter Siris






                                   PROPOSAL I

                    AMENDMENT TO CERTIFICATE OF INCORPORATION
                            TO EFFECT AN INCREASE IN
                        AUTHORIZED SHARES OF COMMON STOCK

     The  Company's   Certificate  of  Incorporation   currently   provides  for
authorized  capital  consisting of 30,000,000 shares of Common Stock,  $.001 par
value and 5,000,000  shares of Preferred  Stock,  $.01 par value.  At the Annual
Meeting,  the  stockholders  will be  asked  to vote  upon an  amendment  to the
Certificate  of  Incorporation  of the Company  (the  "Proposed  Amendment")  to
increase the number of authorized  shares of Common  Stock,  $.001 par value per
share, from 30,000,000 to 75,000,000  shares. The number of shares of authorized
Preferred Stock will remain unchanged.  Approval of this amendment  requires the
affirmative  vote of the holders of a majority of the Shares of Common  Stock of
the Company that are issued and  outstanding as of the Record Date. The Proposed
Amendment   would  amend  Article   FOURTH  of  the  Company's   Certificate  of
Incorporation.  The Proposed Amendment is set forth in full as Exhibit A to this
Proxy Statement.

     The Board of Directors  considers the Proposed Amendment advisable in order
to provide flexibility for future capital  requirements.  The development of the
Company to date has been  financed in part  through  the  issuance of its Common
Stock or  securities  convertible  into Common  Stock and the Board of Directors
believes  that it would be beneficial to the Company to be in a position to make
additional  issuances  of  such  Common  Stock  or  convertible   securities  if
circumstances  warrant such issuances.  Of the 30,000,000 shares of Common Stock
currently  authorized,  a total  of  23,916,139  shares  have  been  issued.  In
addition,  approximately  8,220,150  shares have been reserved for issuance upon
exercise of outstanding options and warrants. The Company,  therefore, would not
have  sufficient  authorized but unissued  shares of Common Stock to satisfy its
current contractual  obligations if it were to issue all of the shares of Common
Stock  currently  reserved  for issuance  upon  exercise of options and warrants
outstanding  and available  for future grant under its stock option  plans.  Mr.
Neil Cole, the Company's  Chairman and Chief  Executive  Officer has advised the
Company that he will not exercise  certain  options owned by him until such time
as the Company's authorized shares of common stock is increased or the aggregate
number of  outstanding  shares of Common Stock and securities  convertible  into
Common Stock are less than the number of shares of Common Stock then authorized.
Approval by the  stockholders  of the Proposed  Amendment at the Annual  Meeting
will avoid the possible need to call and hold a special meeting for that purpose
at a later date on an accelerated timetable. The Board of Directors is empowered
to authorize the issuance of the additional  shares of Common Stock at such time
or  times,  to such  persons  and for  such  consideration  as the  Board  deems
appropriate, without further shareholder action. Although such additional shares
could be used to dilute the share ownership of persons seeking to obtain control
of the Company,  approval of the Proposed Amendment is not being sought for that
purpose.  The Company  has no current  plans to issue the  additional  shares of
Common  Stock that are the  subject of the  Proposed  Amendment  other than with
respect to any  obligation it has under  existing  options and warrants that are
outstanding or available for future grant pursuant to the Company's stock option
plans,  and in connection with the Company's  requirement to issue shares of its
Common  Stock as a final  payment in the  settlement  of the Willow  Creek class
action.

     None of the Company's Common Stock has any pre-emptive rights.

Recommendation
                  THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT IS
IN THE BEST INTEREST OF THE COMPANY AND RECOMMENDS A VOTE "FOR" THE PROPOSED
AMENDMENT.







                                   PROPOSAL II

                                ADOPTION OF 2002
                                STOCK OPTION PLAN

     At the Annual Meeting, the Company's  stockholders will be asked to approve
the  adoption  of the  Company's  2002  Stock  Option  Plan and to  provide  for
3,000,000  shares of Common  Stock to be reserved  for  issuance  under the 2002
Stock Option Plan.

     The Board  believes  that in order to enable  the  Company to  continue  to
attract and retain  personnel  of the highest  caliber,  provide  incentive  for
officers, directors, key employees and other key persons and continue to promote
the well-being of the Company, it is in the best interest of the Company and its
stockholders to provide to officers,  directors, key employees,  consultants and
other independent contractors who perform services for the Company,  through the
granting of stock  options,  the  opportunity to participate in the value and/or
appreciation  in value of the Company's  Common Stock.  The Board has found that
the grant of options  under stock option plans has proven to be a valuable  tool
in attracting and retaining key employees.  It believes that such authority,  in
view of the  substantial  growth of the  Company  and need to  continue to grow,
should be expanded to include the adoption of the 2002 Stock  Option  Plan.  The
Board  believes that such  authority  will provide the Company with  significant
means to continue to attract and retain talented  personnel and maintain current
key employees.

     To date,  no options have been granted under the 2002 Stock Option Plan. If
the 2002 Stock Option Plan is approved by the Company's stockholders, options to
purchase up to 2,000,000 shares of Common Stock may be granted under the plan by
the Board or a Committee of the Board  responsible for  administering  the plan.
The timing and  specific  terms of any grants and the  recipients  of any grants
cannot be determined at this time.

     The following  table sets forth certain  information  as of the Record Date
regarding  outstanding  options , warrants and other  rights to purchase  Common
Stock that were outstanding on the Record Date.




------------------------------ ------------------------ ------------------------- ------------------------------
                                         (a)                      (b)                          (c)
------------------------------ ------------------------ ------------------------- ------------------------------
        Plan Category           Number of securities        Weighted-average          Number of securities
                                  to be issued upon        exercise price of          remaining for future
                                     exercise of          outstanding options,        issuance under equity
                                outstanding options,      warrants and rights          compensation plans
                                 warrants and rights                                  (excluding securities
                                                                                    reflected in column (a))
------------------------------ ------------------------ ------------------------- ------------------------------
                                                                               

Equity compensation plans           5,150,525                   2.42                         88,125
  approved by security holders

Equity compensation plans             920,000                   2.47                      1,070,000
  not approved by security
  holders *

Acquired/Assumed equity                     -                      -                              -
  compensation plans
  (Aggregated)

Individual Arrangements               991,500                   2.42                              -
  (Aggregated)

------------------------------ ------------------------ ------------------------- ------------------------------
                                    7,062,025                   2.43                      1,158,125
          Total
------------------------------ ------------------------ ------------------------- ------------------------------


         ______

               *  Represents  options  granted  under the  Company's  2001 Stock
          Option Plan which plan provides for the grant of non-qualified options
          to purchase up to 2,000,000  shares of the  Company's  Common Stock at
          exercise  prices equal to the fair market value of the Common Stock on
          the date of grant.  The terms of the  options  and the persons to whom
          the options are issued is determined by the administrators of the 2001
          Stock Option Plan which is administered by either the Company' s Board
          of Directors or a committee  of at least two Board  members.  The 2001
          Plan expires in December 2011.

     The following  summary of the 2002 Stock Option Plan does not purport to be
complete  and is  qualified in its entirety by reference to the full text of the
2002 Stock Option Plan attached as Exhibit B to this Proxy Statement.

Summary of the 2002 Stock Option Plan

     In May 2002,  the Board of  Directors  approved the 2002 Stock Option Plan,
and recommended that the Company's stockholders adopt the 2002 Stock Option Plan
at the Annual Meeting of  Stockholders.  Pursuant to the 2002 Stock Option Plan,
officers,  directors,  employees and consultants of the Company will be eligible
to receive  incentive stock options  ("Incentive  Stock Options") as provided in
Section 422 of the Internal Revenue Code of 1986, as amended,  (the "Code"), and
"non-qualified" stock options to purchase up to an aggregate of 3,000,000 shares
of Common  Stock.  The number of shares of Common  Stock that may be granted and
the timing of grants to  executive  officers and  non-executive  officers of the
Company  under the 2002 Stock  Option Plan is subject to the  discretion  of the
Board of Directors or a Committee of the Board that will administer the plan. On
May 15, 2002,  the closing  price of the  Company's  Common Stock as reported by
NASDAQ was $ 4.70.

     The 2002 Stock Option Plan will be administered by the Board or a Committee
appointed  by the Board.  The Board or  Committee  will  determine,  among other
things,  the  persons  to whom  options  will be  granted,  the types of options
granted,  the  number of shares  subject  to  options  and the  exercise  price,
provided  that  the  exercise   price  of  all   Incentive   Stock  Options  and
non-qualified  stock options  granted must be at least equal to 100% of the fair
market  value of the  Common  Stock  on the  date of grant  (110% in the case of
Incentive  Stock Options  granted to  stockholders  who own more than 10% of the
outstanding  Common Stock) or earlier as determined by the Board or Committee or
as otherwise set forth in the plan. The Board or Committee  also  determines the
term of each option,  the restrictions or limitations  thereof and the manner in
which each option may be exercised.  Options  granted under the plan will expire
not later than the tenth anniversary of the date of grant (the fifth anniversary
in the case of Incentive Stock Options granted to stockholders who own more than
10% of the outstanding Common Stock).  With certain limited  exceptions,  in the
event that an option  holder  ceases to be employed by the Company,  such option
holder's options terminate.  Pursuant to the provisions of the 2002 Stock Option
Plan,  the aggregate  fair market value,  determined as of the date(s) of grant,
for which  Incentive  Stock  Options are first  exercisable  by an option holder
during any calendar year cannot exceed $100,000.

Certain Federal Income Tax Consequences of the 2002 Stock Option Plan

     The  following  is a brief  summary of the  Federal  income tax  aspects of
grants made under the 2002 Stock  Option Plan based upon  statutes,  regulations
and  interpretations in effect on the date hereof.  This summary is not intended
to be exhaustive, and does not describe state or local tax consequences.

     1.  Incentive  Stock  Options.  The  participant  will recognize no taxable
income  upon  the  grant  or  exercise  of an  Incentive  Stock  Option.  Upon a
disposition  of the  shares  after the later of two years from the date of grant
and one year  after  the  transfer  of the  shares to the  participant,  (i) the
participant  will recognize the difference,  if any, between the amount realized
and the exercise price as long-term  capital gain or long-term  capital loss (as
the case may be) if the shares are capital assets in his or her hands;  and (ii)
the Company will not qualify for any deduction in  connection  with the grant or
exercise of the  options.  The excess,  if any, of the fair market  value of the
shares on the date of exercise of an  Incentive  Stock  Option over the exercise
price will be treated as an item of  adjustment  for his or her taxable  year in
which the exercise occurs and may result in an alternative minimum tax liability
for the participant.  In the case of a disposition of shares in the same taxable
year as the exercise where the amount  realized on the  disposition is less than
the fair market  value of the shares on the date of  exercise,  there will be no
adjustment  since the amount treated as an item of adjustment,  for  alternative
minimum tax  purposes,  is limited to the excess of the amount  realized on such
disposition over the exercise price which is the same amount included in regular
taxable income.

     If Common Stock acquired upon the exercise of an Incentive  Stock Option is
disposed of prior to the expiration of the holding periods  described above, (i)
the participant will recognize ordinary  compensation income in the taxable year
of  disposition  in an amount equal to the excess,  if any, of the lesser of the
fair market  value of the shares on the date of exercise or the amount  realized
on the disposition of the shares,  over the exercise price paid for such shares;
and (ii) the  Company  will  qualify  for a  deduction  equal to any such amount
recognized,  subject to the  requirements of Section 162(m) of the Code and that
the compensation be reasonable.  The participant  will recognize the excess,  if
any, of the amount realized over the fair market value of the shares on the date
of exercise, if the shares are capital assets in his or her hands, as short-term
or long-term capital gain,  depending on the length of time that the participant
held the shares,  and the Company will not qualify for a deduction  with respect
to such excess.

     Subject to certain  exceptions  for  disability  or death,  if an Incentive
Stock Option is exercised  more than three months  following the  termination of
the  participant's  employment,   the  option  will  generally  be  taxed  as  a
Non-Qualified Stock Option.

     2. Non-Qualified Stock Options. With respect to non-qualified stock options
(i) upon grant of the option,  the  participant  will recognize no income;  (ii)
upon exercise of the option (if the shares are not subject to a substantial risk
of forfeiture),  the participant will recognize ordinary  compensation income in
an amount equal to the excess, if any, of the fair market value of the shares on
the date of exercise over the exercise price, and the Company will qualify for a
deduction in the same amount,  subject to the  requirements of Section 162(m) of
the Code and that the  compensation  be  reasonable;  (iii) the Company  will be
required to comply with applicable  Federal income tax withholding  requirements
with respect to the amount of ordinary  compensation  income  recognized  by the
participant;  and (iv) on a sale of the shares,  the participant  will recognize
gain or loss equal to the  difference,  if any,  between the amount realized and
the sum of the exercise price and the ordinary  compensation  income recognized.
Such gain or loss will be treated as  short-term  or  long-term  capital gain or
loss if the shares are capital assets in the participant's  hands depending upon
the length of time that the participant held the shares.

Recommendation

     THE BOARD OF DIRECTORS  BELIEVES  THAT THE 2002 STOCK OPTION PLAN IS IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY  RECOMMENDS A
VOTE FOR THE APPROVAL OF THE 2002 STOCK OPTION PLAN.

                                  PROPOSAL III

                               RATIFICATION OF THE
                       APPOINTMENT OF INDEPENDENT AUDITORS

     BDO Seidman,  LLP has audited and reported upon the financial statements of
the  Company  for Fiscal  2002.  The Board of  Directors  has  re-appointed  BDO
Seidman, LLP as the Company's  independent  accountants for the Company's fiscal
year ending  January 31,  2003.  Although  stockholder  approval of the Board of
Directors'  appointment of BDO Seidman, LLP is not required by law, the Board of
Directors  believes that it is advisable to give  stockholders an opportunity to
ratify  this  appointment.  Furthermore,  although  the  Board of  Directors  is
submitting the appointment of BDO Seidman, LLP for stockholder ratification,  it
reserves  the right,  even after  ratification  by  stockholders,  to change the
appointment of BDO Seidman, LLP as auditors,  at any time during the 2003 fiscal
year,  if it deems such change to be in the best  interests  of the  Company.  A
representative  of BDO  Seidman,  LLP is  expected  to be  present at the Annual
Meeting with the  opportunity  to make a statement if he or she desires to do so
and is expected to be available to respond to appropriate questions.

     Audit Fees. The aggregate fees billed by BDO Seidman,  LLP for professional
services rendered for the audit of the Company's annual financial statements for
Fiscal  2002  and  the  reviews  of the  financial  statements  included  in the
Company's Form 10-Q's for Fiscal 2002 totaled $224,000.

     Financial Information Systems Design and Implementation Fees. There were no
fees billed to the Company by BDO Seidman, LLP for professional services related
to financial  information systems design and implementation by BDO Seidman,  LLP
for Fiscal 2002.

     All Other Fees.  The  aggregate  fees billed for  services  rendered by BDO
Seidman,  LLP,  other  than  for  audit  and  information  technology  services,
described in the preceding two paragraphs,  totaled $356,000 for Fiscal 2002, of
which  $336,000  related  to tax  services  and  $20,000  related  to all  other
services.

     The Audit  Committee  has  considered  whether  the  provision  of services
covered in the preceding  two  paragraphs is  compatible  with  maintaining  BDO
Seidman, LLP's independence.

Recommendation

     THE  BOARD  OF  DIRECTORS   RECOMMENDS  A  VOTE  FOR  RATIFICATION  OF  THE
APPOINTMENT OF BDO SEIDMAN,  LLP AS THE COMPANY'S  INDEPENDENT  AUDITORS FOR THE
FISCAL YEAR ENDING JANUARY 31, 2003.

                  STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING

     Stockholders who wish to present proposals appropriate for consideration at
the Company's  annual meeting of  stockholders  to be held in the year 2003 must
submit the  proposal  in proper  form to the Company at its address set forth on
the  first  page of this  proxy  statement  and in  accordance  with  applicable
regulations  of the SEC not  later  than  January  27,  2003  in  order  for the
proposition to be considered for inclusion in the Company's  proxy statement and
form of proxy relating to such annual meeting.  Any such  proposals,  as well as
any  questions  related  thereto,  should be  directed to the  Secretary  of the
Company.

     After the January 27, 2003 deadline,  a stockholder  may present a proposal
at the  Company's  2002  annual  meeting  if it is  submitted  to the  Company's
Secretary at the address set forth above no later than April 13, 2003. If timely
submitted,  in proper form, the stockholder may present the proposal at the 2003
annual  meeting,  but the Company is not  obligated to include the matter in its
proxy statement.

                                OTHER INFORMATION

     Proxies  for the  Annual  Meeting  will be  solicited  by mail and  through
brokerage  institutions  and  all  expenses  involved,  including  printing  and
postage, will be paid by the Company.

     A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JANUARY 31,
2002 ON FORM 10-K IS BEING FURNISHED  HEREWITH TO EACH  STOCKHOLDER OF RECORD AS
OF THE CLOSE OF  BUSINESS  ON MAY 24,  2002.  ADDITIONAL  COPIES OF SUCH  ANNUAL
REPORT WILL BE PROVIDED FOR A NOMINAL CHARGE UPON WRITTEN REQUEST TO:

                                 CANDIE'S, INC.
                               400 COLUMBUS AVENUE
                          VALHALLA, NEW YORK 10595-1335
                         ATTENTION: DEBORAH SORELL STEHR

     The  Board of  Directors  is aware of no other  matters,  except  for those
incident  to the  conduct of the Annual  Meeting,  that are to be  presented  to
stockholders  for formal action at the Annual Meeting.  If,  however,  any other
matters properly come before the Annual Meeting or any adjournments  thereof, it
is the  intention  of the  persons  named  in the  proxy  to vote  the  proxy in
accordance with their judgment.

                                          By order of the Board of
                                           Directors,


                                          Neil Cole,
                                          Chairman of the Board,
                                          President and Chief Executive Officer

May 28, 2002





                                    EXHIBIT A

                              FORM OF AMENDMENT TO
                          CERTIFICATE OF INCORPORATION


     The  Certificate of  Incorporation  of the  Corporation has been amended as
follows by striking  out the first  sentence of Article  FOURTH as it now exists
and  inserting  in lieu and  instead  thereof a new first  sentence  of  Article
FOURTH, reading as follows:

          "The total number of shares of stock which the Corporation  shall have
     authority  to  issue  is  eighty  million  (80,000,000)  shares,  of  which
     seventy-five  million (75,000,000) shares shall be common stock, of the par
     value of $.001 per share,  and five  million  (5,000,000)  shares  shall be
     preferred stock, of the par value of $.01 per share."







                                    EXHIBIT B

                             2002 STOCK OPTION PLAN
                                       OF
                                 CANDIE'S, INC.


     1. Purpose.  Candie's,  Inc. (the "Company")  desires to attract and retain
the best  available  talent and encourage the highest  level of  performance  in
order  to  continue  to  serve  the  best  interests  of the  Company,  and  its
stockholders.  By affording  key personnel and other persons who are expected to
contribute to the success of the Company the opportunity to acquire  proprietary
interests in the Company and by providing  them  incentives to put forth maximum
efforts  for the  success  of the  Company,  the 2002 Stock  Option  Plan of the
Company (the "2002 Plan") is expected to contribute  to the  attainment of those
objectives.

     The word  "Subsidiary" or  "Subsidiaries",  as used herein,  shall have the
meaning set forth in Section  424(f) of the Internal  Revenue  Code of 1986,  as
amended (the "Code"), or any successor thereto.

     The word  "Parent"  as used  herein,  shall have the  meaning  set forth in
Section 424(e) of the Code, or any successor thereto.


     2. Scope and  Duration.  Options  under the 2002 Plan may be granted in the
form of incentive stock options ("Incentive Options") as provided in Section 422
of the  Code,  or in the  form of  nonqualified  stock  options  ("Non-Qualified
Options"). (Unless otherwise indicated, references in the 2002 Plan to "options"
include  Incentive  Options and  Non-Qualified  Options.) The maximum  aggregate
number of shares as to which  options may be granted from time to time under the
2002  Plan is  2,000,000  shares of the  common  stock of the  Company  ("Common
Stock"),  which  shares  may be, in whole or in part,  authorized  but  unissued
shares or shares  reacquired by the Company.  The maximum  number of shares with
respect to which  options may be granted  under the 2002 Plan to any  individual
employee of the Company or a  subsidiary  of the Company  during the term of the
2002 Plan is 1,000,000.  If an option shall expire,  terminate or be surrendered
for  cancellation  for any reason  without  having been  exercised in full,  the
shares  represented  by the option or portion  thereof  not so  exercised  shall
(unless  the  2002  Plan  shall  have  been  terminated)  become  available  for
subsequent  option  grants  under the 2002 Plan.  As  provided in  Paragraph  13
hereof,  the 2002  Plan  shall  become  effective  on May 8,  2002,  and  unless
terminated sooner pursuant to Paragraph 14 hereof, the 2002 Plan shall terminate
on May 8, 2012, and no option shall be granted hereunder after that date.

     3.  Administration.  The 2002 Plan  shall be  administered  by the Board of
Directors  of the  Company,  or, at their  discretion,  by a  committee  that is
appointed by the Board of Directors to perform such function (the  "Committee").
The  Committee  shall  consist  solely of at least two  members  of the Board of
Directors,  each of whom shall serve at the  pleasure of the Board of  Directors
and shall be a "Non-Employee  Director" as defined in Rule l6b-3 pursuant to the
Securities  Exchange  Act of 1934 (the  "Act")  or any  successor  rule and,  if
practicable,  shall be "outside  directors" as defined in Section  162(m) of the
Code.  Vacancies occurring in the membership of the Committee shall be filled by
appointment by the Board of Directors.

     The Board of  Directors  or the  Committee,  as the case may be, shall have
plenary  authority in its sole discretion,  subject to and not inconsistent with
the express  provisions  of the 2002 Plan,  to grant  options,  to determine the
purchase  price of the Common  Stock  covered by each  option,  the term of each
option,  the persons to whom,  and the time or times at which,  options shall be
granted  and the  number of shares to be covered by each  option;  to  designate
options as Incentive  Options or  Non-Qualified  Options;  to interpret the 2002
Plan; to prescribe, amend and rescind rules and regulations relating to the 2002
Plan; to determine the terms and provisions of the option agreements (which need
not be identical)  entered into in connection  with options under the 2002 Plan;
and to make all other  determinations  deemed  necessary  or  advisable  for the
administration of the 2002 Plan. The Board of Directors or the Committee, as the
case may be, may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable,  and the Board of Directors
or the  Committee,  as the case may be, or any  person to whom it has  delegated
duties as aforesaid  may employ or engage one or more  persons to render  advice
with respect to any responsibility  the Board of Directors or the Committee,  as
the case may be, or such person may have under the 2002 Plan.


     4.  Eligibility;  Factors to be Considered in Granting  Options.  Incentive
Options  shall be limited to persons  who are  employees  of the  Company or its
present and future Subsidiaries or, if applicable, its present and future Parent
and at the date of grant of any option  are in the employ of the  Company or its
present and future  Subsidiaries or Parent. In determining the employees to whom
Incentive  Options  shall be  granted  and the number of shares to be covered by
each Incentive Option, the Board of Directors or the Committee,  as the case may
be, shall take into account the nature of employees'  duties,  their present and
potential  contributions to the success of the Company and such other factors as
it shall deem relevant in connection with accomplishing the purposes of the 2002
Plan.  An employee who has been granted an option or options under the 2002 Plan
may be  granted  an  additional  option  or  options,  subject,  in the  case of
Incentive  Options,  to such  limitations  as may be imposed by the Code on such
options.  Except as provided below, a Non-Qualified Option may be granted to any
person,   including,   but  not  limited  to,  employees,   independent  agents,
consultants,  attorneys  and  advisors,  who  the  Board  of  Directors  or  the
Committee, as the case may be, believes has contributed,  or will contribute, to
the success of the Company.

     5. Option  Price.  The purchase  price of the Common Stock  covered by each
option shall be  determined by the Board of Directors or the  Committee,  as the
case may be,  and  shall  not be less  than  100% of the Fair  Market  Value (as
defined in  Paragraph  15 hereof) of a share of the Common  Stock on the date on
which the option is  granted.  Such price  shall be  subject  to  adjustment  as
provided in Paragraph 12 hereof. The Board of Directors or the Committee, as the
case may be,  shall  determine  the date on which an option is  granted;  in the
absence of such a determination, the date on which the Board of Directors or the
Committee,  as the case may be, adopts a resolution  granting an option shall be
considered the date on which such option is granted.

     6. Term of Options. The term of each option shall be not more than 10 years
from the date of grant, as the Board of Directors or the Committee,  as the case
may  be,  shall  determine,  subject  to  earlier  termination  as  provided  in
Paragraphs 10 and 11 hereof.


     7.  Exercise of Options.  (a) Subject to the  provisions  of the 2002 Plan,
options  granted under the 2002 Plan shall become  exercisable  as determined by
the Board of Directors or Committee, as the case may be. In its sole discretion,
the Board of Directors or the Committee, as the case may be, may, in any case or
cases,  prescribe that options granted under the 2002 Plan become exercisable in
installments  or provide that an option may be exercisable  in full  immediately
upon the date of its grant or at a later  date.  The Board of  Directors  or the
Committee, as the case may be, may, in its sole discretion, also provide that an
option granted pursuant to the 2002 Plan shall immediately become exercisable in
full upon the happening of any of the  following  events or such other events as
the Board of Directors or the Committee,  as the case may be, determines:  (i) a
"change in control" of the Company as hereafter defined; or (ii) with respect to
an employee,  on his 65th birthday. In the event of a question or controversy as
to whether or not any of the events  hereinabove  described  has taken place,  a
determination  by the Board of Directors or the  Committee,  as the case may be,
that such event has or has not occurred shall be conclusive and binding upon the
Company and participants in the 2002 Plan.


     (b) For  purposes  of the 2002 Plan,  a "change in control of the  Company"
shall be deemed to occur,  unless  previously  consented  to in  writing  by the
optionee or any person entitled to act under  Paragraph 11 hereof,  upon (i) the
actual  acquisition  or the  execution of an agreement to acquire 15% or more of
the voting securities of the Company by any person or entity not affiliated with
the grantee, or any person entitled to act under Paragraph 11 hereof (other than
pursuant to a bona fide underwriting agreement relating to a public distribution
of  securities of the Company),  (ii) the  commencement  of a tender or exchange
offer for more than 15% of the voting securities of the Company by any person or
entity not  affiliated  with the grantee,  or any persons  entitled to act under
Paragraph  11 hereof,  (iii) the  commencement  of a proxy  contest  against the
management  for the  election  of a majority  of the Board of  Directors  of the
Company if the group  conducting  the proxy contest owns, has or gains the power
to vote at least 15% of the voting securities of the Company, (iv) a vote by the
Board of Directors to merge,  consolidate,  sell all or substantially all of the
assets of the Company to any person or entity not  affiliated  with the grantee,
or any persons entitled to act under Paragraph 11 hereof, or (v) the election of
directors  constituting  a majority of the Board of Directors  who have not been
nominated or approved by the  Company;  provided,  however,  for purposes of the
2002 Plan,  it shall not be deemed a change in  control  of the  Company if such
person or entity  acquires 15% or more of the voting  securities  of the Company
(A) as a result of a combination of the Company or a wholly-owned  subsidiary of
Company  with  another  entity  owned or  controlled  by such  persons or entity
(whether effected by a merger, sale of assets or exchange of stock or otherwise)
(the  "Combination")  and (B)  after  completion  of the  Combination  and for a
continuous  period of not less than twelve (12) months  thereafter (I) executive
officers of the Company  (as  designated  in the  Company's  most recent  Annual
Report on Form 10-K or its most recent Proxy Statement filed with the Securities
and  Exchange  Commission  with respect to its Annual  Meeting of  Stockholders)
immediately  prior  to the  Combination  constitute  not  less  than  50% of the
executive  officers of the Company after the  Combination or (II) the members of
the  Board  of  Directors  of  Company  immediately  prior  to  the  Combination
constitute  not less than 50% of the membership of the Board of Directors of the
Company  after the  Combination.  For  purposes  of  calculating  the  executive
officers of the Company after the Combination,  those executive officers who are
terminated by the Company for cause or who terminate  their  employment  without
good reason,  as  determined  by the Board of  Directors  or Committee  shall be
excluded from the calculation entirely.

     (c) Any  option  at any time  granted  under  the 2002  Plan may  contain a
provision to the effect that the optionee (or any persons  entitled to act under
Paragraph 11 hereof) may, at any time at which Fair Market Value is in excess of
the  exercise  price and prior to  exercising  the option,  in whole or in part,
request that the Company purchase all or any portion of the option as shall then
be exercisable at a price equal to the difference between (i) an amount equal to
the option price  multiplied by the number of shares  subject to that portion of
the option in respect  of which  such  request  shall be made and (ii) an amount
equal to such  number  of  shares  multiplied  by the fair  market  value of the
Company's  Common  Stock  (within the meaning of Section 422 of the Code and the
treasury  regulations  promulgated  thereunder)  on the  date of  purchase.  The
Company shall have no obligation to make any purchase  pursuant to such request,
but if it elects to do so, such portion of the option as to which the request is
made shall be surrendered to the Company.  The purchase price for the portion of
the  option  to be so  surrendered  shall  be  paid  by the  Company,  less  any
applicable withholding tax obligations imposed upon the Company by reason of the
purchase,  at the election of the Board of Directors  or the  Committee,  as the
case may be,  either in cash or in shares of Common Stock (valued as of the date
and in the manner provided in clause (ii) above),  or in any combination of cash
and  Common  Stock,  which  may  consist,  in  whole or in part,  of  shares  of
authorized  but  unissued  Common  Stock or shares of Common  Stock  held in the
Company's  treasury.  No  fractional  share of Common  Stock  shall be issued or
transferred  and any fractional  share shall be  disregarded.  Shares covered by
that  portion  of any  option  purchased  by the  Company  pursuant  hereto  and
surrendered  to the Company  shall not be available  for the granting of further
options  under  the 2002  Plan.  All  determinations  to be made by the  Company
hereunder shall be made by the Board of Directors or the Committee,  as the case
may be.


     Any option  granted under the 2002 Plan may also contain a provision to the
effect  that the  payment of the  exercise  price may be made by delivery to the
Company by the optionee of an executed  exercise form together with  irrevocable
instructions  to a broker-dealer  to sell or margin a sufficient  portion of the
shares sold or margined and deliver the sale or margin loan proceeds directly to
the Company to pay for the exercise price.


     (d) An option may be exercised,  at any time or from time to time (subject,
in the case of Incentive Options,  to such restrictions as may be imposed by the
Code),  as to  any or  all  full  shares  as to  which  the  option  has  become
exercisable  until the expiration of the period set forth in Paragraph 6 hereof,
by the  delivery to the Company,  at its  principal  place of  business,  of (i)
written  notice of exercise in the form  specified  by the Board of Directors or
the  Committee,  as the case may be,  specifying  the number of shares of Common
Stock  with  respect to which the  option is being  exercised  and signed by the
person  exercising the option as provided  herein,  (ii) payment of the purchase
price;  and (iii) in the case of Non-Qualified  Options,  payment in cash of all
withholding tax obligations  imposed on the Company by reason of the exercise of
the option.  Upon  acceptance  of such notice,  receipt of payment in full,  and
receipt of payment of all withholding tax  obligations,  the Company shall cause
to be issued a certificate representing the shares of Common Stock purchased. In
the event the person  exercising the option  delivers the items specified in (i)
and (ii) of this Subsection (d), but not the item specified in (iii) hereof,  if
applicable,  the option shall still be considered  exercised upon  acceptance by
the  Company  for the full  number of shares of Common  Stock  specified  in the
notice of exercise  but the actual  number of shares  issued shall be reduced by
the smallest  number of whole shares of Common Stock which,  when  multiplied by
the  Fair  Market  Value of the  Common  Stock  as of the  date  the  option  is
exercised, is sufficient to satisfy the required amount of withholding tax.

     (e) If the payment of the  purchase  price is to be made in cash,  the cash
purchase price of the shares as to which an option is exercised shall be paid in
full at the time of exercise.  Payment shall be made in cash,  which may be paid
by check or other instrument acceptable to the Company; in addition,  subject to
compliance with applicable laws and regulations and such conditions as the Board
of  Directors  or the  Committee,  as the case may be, may impose,  the Board of
Directors or the Committee, as the case may be, in its sole discretion, may on a
case-by-case  basis  elect to accept  payment  in shares of Common  Stock of the
Company  which are already owned by the option holder and have been owned by the
option  holder for at least six  months  (or such  other  period as the Board or
Committee,  as the case may be,  determines),  valued at the Fair  Market  Value
thereof (as defined in Paragraph  15 hereof) on the date of exercise;  provided,
however,  that with  respect to Incentive  Options,  no such  discretion  may be
exercised unless the option agreement  permits the payment of the purchase price
in that manner.

     (f)Except as provided in Paragraphs 10 and 11 hereof,  no option granted to
an employee may be exercised at any time by such  employee  unless such employee
is then an employee  of the  Company or a  Subsidiary  or Parent.  8.  Incentive
Options.

     (a) With respect to Incentive  Options  granted,  the aggregate Fair Market
Value  (determined  in accordance  with the provisions of Paragraph 15 hereof at
the time the Incentive Option is granted) of the Common Stock or any other stock
of the Company or its current or future  Subsidiaries  or Parent with respect to
which  incentive  stock  options,  as defined in  Section  422 of the Code,  are
exercisable  for the first time by any employee  during any calendar year (under
all  incentive  stock option plans of the Company and its parent and  subsidiary
corporations,  as those  terms are defined in Section 424 of the Code) shall not
exceed $100,000.

     (b) No  Incentive  Option may be awarded to any  employee  who  immediately
prior to the date of the granting of such Incentive Option owns more than 10% of
the  combined  voting power of all classes of stock of the Company or any of its
Subsidiaries  unless the exercise  price under the Incentive  Option is at least
110% of the Fair Market  Value of the Common  Stock on the date of grant and the
option expires within 5 years from the date of grant.

     (c) In the  event  of  amendments  to the  Code or  applicable  regulations
relating to Incentive  Options  subsequent  to the date hereof,  the Company may
amend the provisions of the 2002 Plan, and the Company and the employees holding
options may agree to amend  outstanding  option  agreements,  to conform to such
amendments.

     9.  Non-Transferability of Options.  Except as may be otherwise provided by
the  Board  or  Committee  at or  after  the date of  grant  with  respect  to a
Non-Qualified  Option,  options  granted  under  the  2002  Plan  shall  not  be
transferable otherwise than by will or the laws of descent and distribution, and
options  may be  exercised  during  the  lifetime  of the  optionee  only by the
optionee.  No  transfer  of an option by the  optionee by will or by the laws of
descent and  distribution  shall be  effective  to bind the  Company  unless the
Company shall have been  furnished with written notice thereof and a copy of the
will and such other  evidence as the Company may deem necessary to establish the
validity of the transfer and the  acceptance by the transferor or transferees of
the terms and conditions of such option.

     10.  Termination  of  Employment.  In the event that the  employment  of an
employee  to whom an  option  has been  granted  under  the 2002  Plan  shall be
terminated  (except as set forth below or in Paragraph  11 hereof),  such option
may be,  subject to the  provisions  of the 2002 Plan,  exercised (to the extent
that the employee was entitled to do so at the termination of his employment) at
any time  within  three (3) months  after such  termination  (or such  longer or
shorter  period as may be determined by the Board or Committee,  as the case may
be, at or at any time after the date of grant of the option), but not later than
the date on which the  option  terminates;  provided,  however,  that any option
which  is held by an  employee  whose  employment  is  terminated  for  cause or
voluntarily  without the consent of the Company  (for  purposes of the 2002 Plan
termination  due to retirement at or after age 65 shall be deemed to be with the
consent  of  the  Company)  shall,  to the  extent  not  theretofore  exercised,
automatically  terminate as of the date of termination  of  employment.  As used
herein, "cause" shall mean conduct amounting to fraud,  dishonesty,  negligence,
or engaging in competition or  solicitations in competition with the Company and
breaches  of any  applicable  employment  agreement  between  the Company or any
Subsidiary or Parent and the optionee.  Options  granted to employees  under the
2002 Plan shall not be  affected  by any change of duties or position so long as
the  holder  continues  to be a regular  employee  of the  Company or any of its
current  or  future  Subsidiaries.   Any  option  agreement  or  any  rules  and
regulations  relating to the 2002 Plan may contain such  provisions as the Board
of Directors or the Committee,  as the case may be, shall approve with reference
to the determination of the date employment  terminates and the effect of leaves
of absence. The Board of Directors,  or Committee, as the case may be, shall, in
its sole discretion, determine for purposes of the 2002 Plan whether the Company
has consented to the departure of an employee who voluntarily  leaves the employ
of the Company.

     Notwithstanding the foregoing,  the Board of Directors or Committee, as the
case may be, either at or any time after the date of grant of an option, may, in
its discretion, provide for longer or shorter periods than the periods specified
above  during  which an  option  held by an  employee  may be  exercised  by the
employee after the employee ceases to be employed by the Company or a Subsidiary
or Parent. Any such determination  shall be based upon such factors as the Board
of Directors or the Committee,  as the case may be, shall  determine,  provided,
however,  that no such discretion shall be exercised with respect to an employee
whose  employment  with the Company or Subsidiary or Parent has been  terminated
for cause.


     11. Death or Disability  of Employee.  If an employee to whom an option has
been  granted  under the 2002 Plan shall die while  employed by the Company or a
Subsidiary  or Parent or within  three (3)  months  (or such  longer or  shorter
period as the Board of Directors,  or the  Committee,  as the case may be, shall
determine  at or any time  after  the date of grant  of the  option)  after  the
termination of such  employment  (other than  termination for cause or voluntary
termination  without the consent of the Company),  such option may be exercised,
to the extent  exercisable by the employee on the date of death, by a legatee or
legatees of the employee  under the  employee's  last will, or by the employee's
personal  representative or distributees,  at any time within one year after the
date of the  employee's  death,  but not later than the date on which the option
terminates.  In the event that the  employment  of an employee to whom an option
has been  granted  under the 2002 Plan  shall be  terminated  as the result of a
disability (the  determination  of which shall be made by the Board of Directors
or Committee,  as the case may be), such option may be exercised,  to the extent
exercisable by the employee on the date of such termination,  at any time within
one year  after the date of such  termination,  but not  later  than the date on
which the option terminates.

     Notwithstanding the foregoing, the Board of Directors, or Committee, as the
case may be, either at or at any time after the date of grant of an option, may,
in its  discretion,  provide  for  longer or shorter  periods  than the one year
period  specified  above in which an option held by an employee who ceases to be
employed by the Company as a result of death or disability may be exercised. Any
such  determination  shall  be  based  upon  such  factors  as the  Board or the
Committee, as the case may be, shall determine,  provided, however, that no such
discretion  shall be  exercised  with  respect to an employee who dies after the
employee's  employment  with  the  Company  or  Parent  or  Subsidiary  has been
terminated for cause.


     12. Adjustments Upon Changes in Capitalization,  Etc.  Notwithstanding  any
other  provision of the 2002 Plan, the Board of Directors or the  Committee,  as
the case may be, may, at any time,  make or provide for such  adjustments to the
2002  Plan,  to the  number and class of shares  issuable  thereunder  or to any
outstanding  options  as it  shall  deem  appropriate  to  prevent  dilution  or
enlargement  of  rights,  including  adjustments  in the event of changes in the
outstanding   Common   Stock   by   reason   of  stock   dividends,   split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations,  reorganizations,  liquidations  and the like.  In the event of any
offer to holders of Common Stock generally  relating to the acquisition of their
shares,  the Board of Directors or the  Committee,  as the case may be, may make
such  adjustment  as it deems  equitable in respect of  outstanding  options and
rights,  including in its sole  discretion  revision of outstanding  options and
rights so that they may be  exercisable  for the  consideration  payable  in the
acquisition transaction. Any such determination by the Board of Directors or the
Committee,  as the case may be, shall be conclusive and binding upon the Company
and the participants in the 2002 Plan. Any fractional shares resulting from such
adjustments shall be eliminated.

     13.  Effective  Date. The 2002 Plan shall become  effective on May 8, 2002,
the  date of  adoption  by the  Board of  Directors  of the  Company,  provided,
however,  that no Incentive Option may be granted under the 2002 Plan unless the
2002 Plan is  adopted  by the  stockholders  of the  Company on or before May 7,
2003.

     14.  Termination  and Amendment.  The Board of Directors of the Company may
suspend,  terminate,  modify or amend the 2002 Plan, provided that any amendment
that would increase the aggregate number of shares which may be issued under the
2002  Plan  or  materially   modify  the  requirements  as  to  eligibility  for
participation  in the  2002  Plan,  shall  be  subject  to the  approval  of the
Company's  stockholders,  except that any such increase or modification that may
result from adjustments  authorized by Paragraph 12 hereof does not require such
approval. No suspension, termination, modification or amendment of the 2002 Plan
may, without the consent of the person to whom an option shall  theretofore have
been granted, adversely affect the rights of such person under such option.

     15. Miscellaneous.  As said term is used in the 2002 Plan, the "Fair Market
Value" of a share of Common Stock on any day means:  (a) if the principal market
for  the  Common  Stock  is a  national  securities  exchange  or  the  National
Association of Securities  Dealers Automated  Quotations  System ("NASDAQ),  the
closing sales price of the Common Stock on such day as reported by such exchange
or market system,  or on a consolidated  tape  reflecting  transactions  on such
exchange or market system,  or (b) if the principal  market for the Common Stock
is not a national  securities  exchange  and the  Common  Stock is not quoted on
NASDAQ,  the mean between the highest bid and lowest asked prices for the Common
Stock on such day as reported by the National Quotation Bureau,  Inc.;  provided
that if clauses (a) and (b) of this  paragraph are both  inapplicable,  or if no
trades have been made or no quotes are  available  for such day, the Fair Market
Value of the Common Stock shall be  determined  by the Board of Directors or the
Committee,  as the case may be, and shall be  conclusive  as to the Fair  Market
Value of the  Common  Stock.  In the  event the  Company  is the  subject  of an
acquisition, merger or consolidation or similar transaction where the Company is
not the surviving entity, the Board or Committee, as the case may be, may in its
sole  discretion,  but shall not be required to,  request that as a condition of
the transaction the surviving  entity assume the obligations of the Company with
respect to the options then outstanding under the 2002 Plan.

     The Board of Directors or the  Committee,  as the case may be, may require,
as a condition to the exercise of any options  granted under the 2002 Plan, that
to the extent  required at the time of exercise,  (i) the shares of Common Stock
reserved  for  purposes  of the 2002 Plan shall be duly  listed,  upon  official
notice of issuance,  upon stock exchange(s) on which the Common Stock is listed,
(ii) a Registration Statement under the Securities Act of 1933, as amended, with
respect to such shares shall be  effective,  and/or (iii) the person  exercising
such option deliver to the Company such documents, agreements and investment and
other  representations  as the Board of Directors or the Committee,  as the case
may be, shall determine to be in the best interests of the Company.

     During the term of the 2002 Plan,  the Board of Directors or the Committee,
as the case may be, in its sole discretion, may offer one or more option holders
the  opportunity to surrender any or all unexpired  options for  cancellation or
replacement.  If any options are so  surrendered,  the Board of Directors or the
Committee,  as the case may be, may then grant new  Non-Qualified  or  Incentive
Options to such holders for the same or different numbers of shares at higher or
lower exercise prices than the surrendered options.  Such new options may have a
different  term and shall be subject to the provisions of the 2002 Plan the same
as any other option.

     Anything herein to the contrary notwithstanding,  the Board of Directors or
the  Committee,  as the case may be,  may, in its sole  discretion,  impose more
restrictive conditions on the exercise of an option granted pursuant to the 2002
Plan,  including  the ability of an option  holder to  exercise an option  after
cessation of employment; however, any and all such conditions shall be specified
in the  option  agreement  limiting  and  defining  such  option.  The  Board of
Directors or the Committee,  as the case may be, may also amend the terms of any
option  previously  granted under the 2002 Plan,  provided that the terms of any
such amended  option are not  inconsistent  with any provisions of the 2002 Plan
and that no such amendment  shall  adversely  affect the rights of the person to
whom the option  has been  granted  without  the  consent of such  person or, if
applicable,  the permitted transferee of such optionee or any person entitled to
act under Paragraph 11 hereof.

     Nothing in the 2002 Plan or in any option granted pursuant to the 2002 Plan
shall  confer  upon any  employee  any right to  continue  in the  employ of the
Company  or any  of its  Subsidiaries  or  parent  or  affiliated  companies  or
interfere  in any way with the right of the  Company or any such  Subsidiary  or
parent or affiliated companies to terminate such employment at any time.


     16.  Compliance with SEC  Regulations.  It is the Company's intent that the
2002 Plan  comply in all  respects  with Rule 16b-3 of the Act or any  successor
rule and any regulations  promulgated  thereunder.  If any provision of the 2002
Plan is later found not to be in compliance with said Rule, the provisions shall
be deemed null and void.








PRELIMINARY COPIES                       CANDIE'S, INC.
                               400 Columbus Avenue
                          Valhalla, New York 10595-1335

       PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 24, 2002.
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


     The undersigned hereby appoints NEIL COLE and RICHARD DANDERLINE,  and each
of them, Proxies,  with full power of substitution in each of them, in the name,
place  and  stead  of  the  undersigned,  to  vote  at  the  Annual  Meeting  of
Stockholders of Candie's,  Inc. (the "Company") on Monday, June 24, 2002, at the
New York City offices of the Company,  215 West 40th Street, New York , NY 10018
or at any adjournment or adjournments thereof,  according to the number of votes
that the undersigned would be entitled to vote if personally  present,  upon the
following matters:

1.    ELECTION OF DIRECTORS:




                                                            

|_| FOR all nominees listed below                              |_|  WITHHOLD AUTHORITY
    (except as marked to the contrary below).                       to vote for all nominees listed below.

             Neil Cole, Barry Emanuel, Steven Mendelow, Peter Siris, Ann Iverson and Hubert Guez.


(INSTRUCTION:  To withhold authority to vote for any individual nominee, write that nominee's name in the space below.)


-----------------------------------------------------------------------------------------------------------------------
                                                                           (Continued and to be signed on reverse side)







2.   Approval  of  Amendment  to  Certificate  of   Incorporation   to  Increase
     Authorized Common Stock.

      |_|  FOR                  |_|   AGAINST                      |_|   ABSTAIN

3.   Approval of the 2002 Stock Option Plan.

      |_|  FOR                  |_|   AGAINST                      |_|   ABSTAIN

4.   Ratification  of the  Appointment  of  BDO  Seidman,  LLP as the  Company's
     independent auditors for the fiscal year ending January 31, 2003.

      |_|  FOR                  |_|   AGAINST                      |_|   ABSTAIN

5.   In their  discretion,  the Proxies are  authorized  to vote upon such other
     business as may properly come before the meeting.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS  GIVEN ABOVE. IF NO
INSTRUCTIONS  ARE GIVEN,  THIS PROXY  WILL BE VOTED FOR THOSE  NOMINEES  AND THE
PROPOSALS LISTED ABOVE.


DATED:  ________________________________,  2002

                                                Please sign exactly as name
                                                appears hereon.  When shares are
                                                held by joint  tenants,  both
                                                should  sign.  When signing as
                                                attorney,executor,administrator,
                                                trustee  or  guardian, please
                                                give full title as such.  If a
                                                corporation,  please sign in
                                                full corporate name by President
                                                or other authorized officer.  If
                                                a partnership,  please sign in
                                                partnership name by authorized
                                                person.


                                                --------------------------------
                                                           Signature

                                                --------------------------------
                                                   Signature if held jointly


     Please  mark,  sign,  date and return  this proxy card  promptly  using the
enclosed envelope.