KELLWOOD CO, 10-K405, 1997-07-15

KELLWOOD CO
10-K405, 1997-07-15
WOMEN'S, MISSES', AND JUNIORS OUTERWEAR

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<PAGE> 1

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]
For the fiscal year ended April 30, 1997
-----------------------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
------------------- -------------------

Commission File Number 1-7340
--------------

KELLWOOD COMPANY
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 36-2472410
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

600 KELLWOOD PARKWAY, P.O. BOX 14374, ST. LOUIS, MO 63178
- --------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (314)576-3100
------------------------

Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
Common Stock, par value $.01 New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange

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

===============================================================================
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

At June 30, 1997, Kellwood Company had 21,316,455 shares of Common Stock, par
value $.01, outstanding. While it is difficult to determine the number of
shares owned by nonaffiliates, the Company estimates that the aggregate market
value of the Common Stock on June 30, 1997 (based upon the closing price of
these shares on the New York Stock Exchange) held by nonaffiliates was
approximately $591,500,000.

- -------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE

Annual Report to Shareowners for fiscal year ended April 30, 1997 (Item 1 in
Part I; Items 5, 6, 7 and 8 in Part II, and Part IV).

Proxy Statement for Annual Meeting of Shareowners to be held on August 28,
1997 (Items 10, 11, 12 and 13 in Part III).

<PAGE> 2

PART I

ITEM 1. BUSINESS

(a) Kellwood Company and its subsidiaries (the "Company") manufacture
and market apparel and related soft goods. Kellwood Company was founded in
1961 as the successor by merger of fifteen independent suppliers to Sears.

During the second half of the 1980's and the first half of the
1990's, the Company implemented a business strategy to expand its branded
label products, broaden its customer base, increase its channels of
distribution and further develop its global product sourcing capability.
Since 1985, Kellwood has acquired the following 14 domestic companies.

<TABLE>
<CAPTION>
Company Name Date of Acquisition
------------ -------------------
<S> <C>
* Cape Cod-Cricket Lane, Inc. March, 1985
* Parsons Place Apparel Company, Ltd. (Sag Harbor) June, 1986
* E Z Sportswear (Melrose) December, 1986
* En Chante, Inc. (E*N*C) December, 1986
* Robert Scott Ltd., Inc. (Robert Scott/David
Brooks) July, 1987
David Brooks Ltd., Inc.,
and Andrew Harvey Ltd.
* American Recreation Products, Inc. November, 1988
* Slumberjack, Inc. September, 1989
* Crowntuft Manufacturing Corp. October, 1989
* decorp INC. October, 1990
* California Ivy, Inc. (Ivy) July, 1992
* A. J. Brandon, Inc. December, 1992
* Goodman Knitting Co., Inc. July, 1993
* Halmode Apparel, Inc. September, 1994
* David Dart, Inc. November, 1994
and Force One, Inc.
</TABLE>

These companies are principally marketers of branded apparel except
for American Recreation Products, Inc. and Slumberjack which are manufacturers
and marketers of branded camping soft goods and Crowntuft Manufacturing Corp.
which is a vertically integrated manufacturer of chenille robes.

In addition to its domestic acquisitions, in the early 1980's, the
Company acquired Smart Shirts Limited of Hong Kong, a leading shirt and blouse
manufacturer in the Far East. Smart Shirts, since its acquisition, continued
to diversify its manufacturing capabilities from its principal base of Hong
Kong to the People's Republic of China, Sri Lanka, Saipan and Costa Rica.
During fiscal year 1996, the Company shut down the facilities in Saipan and
Costa Rica.

Kellwood has invested $303 million acquiring companies since the
inception of the acquisition program that began in 1985. These investments
were primarily financed by cash provided from operations and short-term
borrowings. Except for recent acquisitions, Kellwood's short-term borrowings
related to these acquisitions were subsequently replaced with long-term notes
due insurance companies or repaid with cash repatriated from Kellwood's Far
East operations, other cash provided by operations, or cash provided by the
public sale of common stock. The total investment in subsidiaries during
1997, 1996 and 1995 was approximately $11,849,000, $4,935,000, and
$55,218,000, respectively.

As a result of the above business strategy, the Company has
redirected its focus from primarily the manufacturing of private label apparel
and home fashions for Sears to a marketing-driven emphasis on branded apparel
and related soft goods. The Company's acquisition strategy has further
diversified its customer base and has broadened its channels of distribution.
As a result of these efforts, sales to Sears declined to 8% of total sales in
fiscal year 1997, compared to 50% in fiscal year 1985.

-2-
<PAGE> 3

(b) All of the Company's operations are in the apparel and related
soft goods industry.

(c) The Company manufactures and markets apparel and other soft goods
products made from cloth or fabric or knitted from yarn. These products are
manufactured primarily domestically and in the Far East.

(i) The Company's products include diversified lines of men's,
women's and children's clothing, sleeping bags, and other soft goods.
Products are mainly sold to retailers under either the Company's or customer's
brands and labels.

(ii) The Company anticipates no significant change in products or
new industry segments which would require a material investment. However,
business acquisitions within the apparel and related soft goods industry are
continually being considered, and it is anticipated that external and internal
demands will generate increasing requirements for capital. The Company
maintains a credit facility agreement in the amount of $300 million, of which
up to $200 million can be utilized for short-term loans and up to $200 million
can be utilized for letters of credit. The credit facility was effective May
31, 1996. The combined operating, cash and equity position of the Company
should continue to provide the capital flexibility necessary to fund future
opportunities as well as to meet existing obligations.

(iii) The Company purchases the majority of its raw materials
directly from numerous textile mills and yarn producers and converters. The
Company has not experienced difficulty in obtaining raw materials essential to
its business.

(iv) The Company holds patents covering various aspects of its
products, the machinery used to manufacture its products, and various
manufacturing processes. The Company is a licensee of certain trade names and
patented machines and processes. The expiration, or invalidation, of any of
the patents or licenses would not, in the opinion of management, have a
material effect upon the continuation of business.

(v) Although specific styles are seasonal, the Company's various
product lines are manufactured and sold on a year-round basis. Products are
primarily manufactured and sold prior to each of the principal retail selling
seasons including spring, summer, fall and holiday.

(vi) Consistent with the seasonality of specific product
offerings, the Company carries necessary levels of inventory to meet the
anticipated delivery requirements of its customers.

(vii) Approximately $157,148,000 (10%) of the Company's sales in
the fiscal year ended April 30, 1997, were to J. C. Penney Company, Inc. ("J.
C. Penney"). No other customer accounts for more than 10% of the Company's
revenues. Other information relating to J. C. Penney is set forth in the
Company's 1997 Annual Report to Shareowners, under the caption "Significant
Customers" in the Notes to Consolidated Financial Statements, which
information is incorporated herein by reference. The Company's management
believes that the relationship with J. C. Penney will continue into the
foreseeable future.

(viii) Approximately 19% of the Company's domestic sales are
produced under contracts for distribution on a seasonal basis. It is normal
for the merchandise manufactured under these contracts to be sold within 12
months after production. Because of this, the Company does not believe
backlog is significant for this merchandise. In addition to these contracts,
the backlog for domestic operations totalled approximately $541 million as of
April 30, 1997 ($390 million - 1996). The backlog for Far East operations
totalled approximately $83 million ($75 million - 1996). All of the Company's
backlog is expected to be filled within 12 months.

(ix) Government contracts or subcontracts with the Company are
not material.

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<PAGE> 4

(x) The Company has substantial competition from numerous
manufacturers and marketers, but accurate statistics relative to the
competitive position of the Company are not available.

(xi) The Company has a continuing program for the purpose of
improving its products and production machinery. The Company is not engaged
in any material customer-sponsored research and development programs.
Approximately $740,000, $612,000 and $525,000 were spent on research and
development activities during fiscal years 1997, 1996 and 1995, respectively.

(xii) In the opinion of management, there will be no material
effect on the Company resulting from compliance with any federal, state or
local provisions which have been enacted or adopted regulating the discharge
of materials into the environment or otherwise relating to the protection of
the environment.

(xiii) At the end of fiscal 1997, there were approximately 17,300
people employed by the Company. Substantially all of the work force is
non-union, and the Company considers its relations with its employees to be
satisfactory.

(d) Except for its Far East operations, the Company's foreign
activities including foreign manufacturing operations and customers have not
been material. The Company owns all of the outstanding shares of Smart Shirts
Limited, a Hong Kong corporation engaged in apparel manufacturing, and other
Far East companies under Smart Shirts' management. The sales, operating
profit, and identifiable assets attributable to each geographic area are set
forth in the Company's 1997 Annual Report to Shareowners, under the caption
"Industry Segment and Geographic Area Information" in the Notes to
Consolidated Financial Statements, which note is incorporated herein by
reference. The risk attendant to the Company's Far East operations is
slightly greater than that of domestic operations primarily due to quota
allocations and political instability. Utilization of existing quota rights
and diversification of Far East manufacturing capacity to various countries
help to mitigate these risks.

ITEM 2. PROPERTIES

At April 30, 1997, the Company operated 31 production plants and various
distribution facilities. Domestic business operated 18 plants in 8 states,
two plants in the Dominican Republic, one plant in Honduras, one plant in El
Salvador and one plant in Canada. These domestically managed plants
aggregated to approximately 3,100,000 square feet and were operating at an
estimated 93% of capacity at April 30, 1997. Sixteen of these domestically
managed plants were primarily producing private label goods and seven were
primarily producing branded goods. The Company's Far East subsidiaries
operated eight plants which aggregated to approximately 757,500 square feet
and were operating at an estimated 90% of capacity. Far East subsidiaries
manage operations in Hong Kong, Sri Lanka and China.

In management's opinion, current facilities generally are well
maintained and provide adequate production capacity for future operations.
However, management continues to evaluate the need to reposition the Company's
portfolio of businesses and facilities to meet the needs of the changing
markets it serves and reflect the international business environment.

The Company's operating facilities are primarily leased under long-term
capital leases with renewal options at decreasing rentals. Certain facilities
are leased under operating leases that generally contain renewal options. The
Company also leases its corporate space in St. Louis County, Missouri and
major showrooms in New York City, New York; Atlanta, Georgia; Dallas, Texas;
and Los Angeles, California.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in several routine lawsuits incidental to the
Company's business. Management and general counsel are of the opinion that
the

-5-
<PAGE> 5

ultimate disposition of such litigation should have no material adverse
effect on the Company's financial position or results of operations.

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

None.

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<PAGE> 6
<TABLE>
EXECUTIVE OFFICERS OF THE REGISTRANT AS OF JUNE 30, 1997
<CAPTION>

Name of Office and Employment During
Officer Age the Last Five Fiscal Years
- ------------------- --- ------------------------------------
<S> <C> <C>
William J. McKenna 70 Chairman and Chief Executive Officer
since November 22, 1994; Chairman,
President and Chief Executive Officer
(1991-1994)

Hal J. Upbin 58 President and Chief Operating Officer
since November 22, 1994; Executive Vice
President Corporate Development (1992-
1994); Vice President Corporate
Development (1990-1992); President of
American Recreation Products, Inc.
(subsidiary) (1988-1992) and Director
since May 1, 1991

James C. Jacobsen 62 Vice Chairman since November 22, 1994;
Executive Vice President Administration
(1989-1994)

Enoch Harding, Jr. 66 Executive Vice President Operations
since April 3, 1995; President of
Kellwood Sportswear (1989-1995)

John R. Henderson 49 Vice President Merchandising since June
1, 1995; Director of Merchandising
(1993-1995); Executive Vice President
Marketing of Kellwood She Knows (1992-
1993)

Lawrence E. Hummel 54 Vice President Controller since February
25, 1992; Controller (1983-1992)

Roger D. Joseph 55 Vice President Treasurer since February
25, 1992; Treasurer (1986-1992)

Leon M. McWhite 55 Vice President Human Resources since
June 1, 1995; Vice President (1994-
1995); President of Kellwood
Lingerie/Activewear (1989-1994)

Thomas H. Pollihan 47 Vice President, Secretary and General
Counsel since May 27, 1993; General
Counsel and Secretary (1989-1993)

Paul M. Rivard 55 Vice President Information Services
since May 27, 1993; Director of
Management Information Services (1990-
1993)

John A. Turnage 51 Vice President Manufacturing and
Sourcing since February 28, 1989
</TABLE>

-6-
<PAGE> 7
PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS

The information required by this Item is set forth in the Company's
1997 Annual Report to Shareowners, at page 1 under the caption "Common Stock
Data," which information is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this Item is set forth in the Company's
1997 Annual Report to Shareowners, at page 24 under the caption "Supplemental
Selected Financial Data," which information is incorporated herein by
reference.

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

The information required by this Item is set forth in the Company's
1997 Annual Report to Shareowners, at pages 25 and 26 under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which information is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements, together with the report thereon
of Price Waterhouse LLP dated May 29, 1997, appearing at pages 14 to 24 of the
Company's 1997 Annual Report to Shareowners, are incorporated herein by
reference.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) The information required by this Item regarding directors is set
forth in the Company's Proxy Statement for the 1997 Annual Meeting of
Shareowners, at pages 3 and 4 under the captions "Nominees for Election to
Serve Until 1999" and "Directors Continuing to Serve Until 1998," which
information is incorporated herein by reference.

(b) Reference is made to "Executive Officers of the Registrant as of
June 30, 1997" in Part I after Item 4.

(c) The information called for with respect to the identification of
certain significant employees is not applicable to the registrant.

(d) There are no family relationships between the directors and
executive officers listed above. There are no arrangements nor understandings
between any named officer and any other person pursuant to which such person
was selected as an officer.

(e) Each of the officers named in Part I was elected to serve in the
office indicated until the first meeting of the Board of Directors following
the Annual Meeting of Shareowners in August 1997 and until his successor is
elected and qualified.

(f) There are no legal proceedings involving directors, nominees for
directors, or officers.

The information required by this Item regarding compliance with Section
16(a) of the Exchange Act is set forth in the Company's Proxy Statement for
the 1997 Annual Meeting of Shareowners at page 14 under the caption
"Compliance with

-7-
<PAGE> 8

Section 16(a) of the Exchange Act," which information is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is set forth in the Company's
Proxy Statement for the 1997 Annual Meeting of Shareowners, at pages 7 through
13 under the captions "Compensation of Executive Officers," "Retirement
Program," and "Other Officer Agreements," which information is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information required by this Item is set forth in the Company's
Proxy Statement for the 1997 Annual Meeting of Shareowners, at pages 2 and 6
under the captions "Security Ownership of Certain Beneficial Owners" and
"Management Ownership of the Company's Stock," which information is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is set forth in the Company's
Proxy Statement for the 1997 Annual Meeting of Shareowners, at page 12 under
the caption "Compensation Committee Interlocks and Insider Participation,"
which information is incorporated herein by reference.

PART IV

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

(a) FINANCIAL STATEMENTS AND SCHEDULES

The consolidated financial statements, together with the report thereon
of Price Waterhouse LLP dated May 29, 1997, appearing at pages 14 to 24 of the
1997 Annual Report to Shareowners are incorporated by reference in this Form
10-K. With the exception of the aforementioned information and information
incorporated in Items 1, 5, 6, 7 and 8, the 1997 Annual Report to Shareowners
is not to be deemed filed as part of this Form 10-K. The following financial
statement schedule should also be read in conjunction with the financial
statements in such 1997 Annual Report to Shareowners. Financial statement
schedules not included in this Form 10-K have been omitted because they are
not applicable or the required information is shown in the financial
statements or notes thereto. Separate financial statements of 50% or less
owned persons accounted for by the equity method which are not shown herein
have been omitted because, if considered in the aggregate, they would not
constitute a significant subsidiary.

(i) Financial Statements:

Report of Independent Accountants

Consolidated Statement of Earnings, Years Ended April 30,
1997, 1996 and 1995

Consolidated Balance Sheet, April 30, 1997 and 1996

Consolidated Statement of Cash Flows, Years Ended April 30,
1997, 1996 and 1995

Consolidated Statement of Shareowners' Equity, Years Ended
April 30, 1997, 1996 and 1995

Notes to Consolidated Financial Statements

(ii) Report of Independent Accountants on Financial Statement
Schedule:

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<PAGE> 9

Financial Statement Schedule for the Years Ended April 30,
1997, 1996 and 1995:
Valuation and Qualifying Accounts (Schedule VIII)

Consent of Independent Accountants

(iii) Exhibits:

Exhibits filed as part of this report are listed below.
Certain exhibits have been previously filed with the
Commission and are incorporated herein by reference.

<TABLE>
<CAPTION>
S.E.C. EXHIBIT
REFERENCE NO. DESCRIPTION
- -------------- -----------
<C> <S>
3.1 - Restated Certificate of Incorporation of Kellwood
Company, as amended, incorporated herein by reference to
Form 10-Q for the quarter ended July 31, 1987, SEC File
No. 1-7340.

3.2 - By-Laws, as amended through November 21, 1995,
incorporated herein by reference to Form 10-K for the
fiscal year ended April 30, 1996, SEC File No. 1-7340.

4.1 - Note Purchase Agreement dated December 29, 1986, with
exhibits, incorporated herein by reference to Form 10-Q
for the quarter ended January 31, 1987, SEC File
No. 1- 7340.

4.2 - Indenture between the Registrant and Centerre Trust
Company of St. Louis, and the 9% Convertible Subordinated
Debentures due 1999, incorporated herein by reference to
Registration Statement on Form S-2, Registration
No. 2- 93522, effective October 18, 1984.

4.3 - Note Agreement dated July 1, 1993, incorporated herein by
reference to Form 10-Q for the quarter ended July 31,
1993, SEC File No. 1-7340.

4.4 - Rights to Acquire Series A Junior Preferred Stock,
pursuant to a Rights Agreement between the registrant and
Centerre Trust Company of St. Louis, incorporated herein
by reference to Registration Statement on Form 8-A,
effective June 24, 1986 and Amendment dated August 21,
1990, incorporated herein by reference to Form 10-Q for
the quarter ended October 31, 1990, and Amendment dated
May 31, 1996 incorporated herein by reference to Form 8-
A/A effective June 3, 1996, SEC File No. 1-7340.

4.5 - Note Purchase Agreement dated December 1, 1987, with
exhibits, incorporated herein by reference to Form 10-Q
for the quarter ended January 31, 1988, SEC File
No. 1- 7340.

4.6 - Note Purchase Agreement dated December 15, 1989, with
exhibits, incorporated herein by reference to the Form
10-Q for the quarter ended January 31, 1990, SEC File No.
1-7340.

4.7 - Credit Agreement dated as of May 31, 1996 among Kellwood
Company, certain commercial lending institutions, and The
Bank of Nova Scotia, as Administrative Agent and
Syndication Agent, and Bank of America National Trust and
Savings Association, as documentation Agent, incorporated
herein by reference to Form 10-K for the fiscal year
ended April 30, 1996, SEC File No. 1-7340.

-9-
<PAGE> 10
<CAPTION>
S.E.C. EXHIBIT
REFERENCE NO. DESCRIPTION
- -------------- -----------
<C> <S>
10.2<F*> - Employment Agreement dated December 9, 1992, between
Kellwood Company and William J. McKenna, effective
December 1, 1992, incorporated herein by reference to the
Form 10-Q for the quarter ended January 31, 1993, SEC
File No. 1-7340; Amendment dated May 28, 1993, effective
May 1, 1993, incorporated herein by reference to Form
10- K for the fiscal year ended April 30, 1993, SEC File
No. 1-7340; and Amendment dated November 26, 1996,
effective May 1, 1996, incorporated herein by reference to
the Form 10-Q for the quarter ended January 31, 1997, SEC
File No. 1-7340.

10.3<F*> - Form of Employment Agreement dated November 30, 1984,
between Kellwood Company and executive officers,
incorporated herein by reference to Form 10-K for the
fiscal year ended April 30, 1985, SEC File No. 1-7340.

10.4<F*> - 1995 Stock Option Plan For Nonemployee Directors and 1995
Omnibus Incentive Stock Option Plan, incorporated herein
by reference to Appendixes A & B to the Company's
definitive Proxy Statement dated July 13, 1995, SEC File
No. 1-7340.

10.5<F*> - Executive Deferred Compensation Plan, adopted and
effective as of January 1, 1997; and Executive Deferred
Compensation Plan Amendment, adopted March 18, 1997,
filed herewith.

10.6<F**> - Agreement for Services Between Kellwood Company and
Electronic Data Systems Corporation, dated June 21, 1996;
and Amendment Regarding Use of Kellwood Purchase Card by
EDS Employees, dated April 29, 1997, filed herewith.

10.7<F*> - Corporate Development Incentive Plan of 1986 (As Amended)
formerly the Key Executive Long-Term Incentive Plan of
1983, incorporated herein by reference to Form 10-K for
the fiscal year ended April 30, 1994, SEC File
No. 1- 7340; and Amendment dated May 29, 1997, incorporated
herein by reference to Exhibit A to the Company's
definitive Proxy Statement dated July 17, 1997, SEC File
No. 1-7340.

13 - Portions of the Annual Report to Shareowners for the
fiscal year ended April 30, 1997, which are incorporated
by reference at Item 1 in Part I, Items 5, 6, 7 and 8 in
Part II, and Part IV; filed herewith.

21 - Subsidiaries of the Company

23 - Consent of Independent Accountants, appearing at page 12
of this report.

24 - Powers of Attorney: Ms. Dickerson and Messrs. Bentele,
Bottum, Genovese, Hunter, Marcus and Wenzel; filed
herewith.

27 - Financial Data Schedule, filed herewith.

<FN>
<F*> Denotes management contract or compensatory plan.

<F**> Pursuant to the Securities Exchange Act of 1934, Rule 24b-2, confidential
portions of Exhibit 10.6 have been deleted and filed separately with the
Commission pursuant to a request for confidential treatment.

(b) REPORTS ON FORM 8-K:

No reports were filed on Form 8-K during the three months ended April
30, 1997.

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<PAGE> 11

SIGNATURES

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

KELLWOOD COMPANY

Dated: July 14, 1997
--------------------------------
Thomas H. Pollihan
Vice President, Secretary and
General Counsel

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

</TABLE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ William J. McKenna Director, Chairman of the July 14, 1997
----------------------- Board, Chief Executive Officer
William J. McKenna (principal executive officer)

/s/ Hal J. Upbin Director, President and July 14, 1997
----------------------- Chief Operating Officer
Hal J. Upbin

/s/ James C. Jacobsen Director, Vice Chairman July 14, 1997
----------------------- (principal financial and
James C. Jacobsen accounting officer)

Raymond F. Bentele Director
/s/ Thomas H. Pollihan
---------------------------
Edward S. Bottum Director Thomas H. Pollihan
Attorney-in-fact
Kitty G. Dickerson Director July 14, 1997

Leonard A. Genovese Director

Jerry M. Hunter Director

James S. Marcus Director

Fred W. Wenzel Director

</TABLE>

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<PAGE> 12

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors
of Kellwood Company

Our audits of the consolidated financial statements referred to in our
report dated May 29, 1997 appearing at page 14 of the 1997 Annual Report to
Shareowners of Kellwood Company (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item
14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.

PRICE WATERHOUSE LLP

St. Louis, Missouri
May 29, 1997

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 033-64847) of Kellwood Company of our report dated
May 29, 1997 appearing at page 14 of the 1997 Annual Report to Shareowners
which is incorporated in this Annual Report on Form 10-K. We also consent to
the incorporation by reference of our report on the Financial Statement
Schedule, which appears at page 12 on this Form 10-K.

PRICE WATERHOUSE LLP

St. Louis, Missouri
July 14, 1997

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<PAGE> 13
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(In Thousands)
<CAPTION>

Column A Column B Column C Column D Column E
- -------- -------- ------------------------- -------- --------
Additions
-------------------------
Balance at Charged to Charged to Balance
beginning costs and other at end
Description of period expenses accounts Deductions of period
----------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED APRIL 30, 1997:

Allowance for
doubtful accounts $5,225 $2,262 -- $1,951<FB> $5,536

YEAR ENDED APRIL 30, 1996:

Allowance for
doubtful accounts 5,709 1,601 -- 2,085<FB> 5,225

YEAR ENDED APRIL 30, 1995:

Allowance for
doubtful accounts 4,273 920 49<FA> (24)<FB> 5,709

<FN>
<FA> Balance acquired with acquisition.
<FB> Write-off bad debts (recoveries), net
</TABLE>

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<PAGE> 14

<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>

S.E.C. Exhibit
Reference No. Description
- -------------- -----------
<C> <S>
3.1 - Restated Certificate of Incorporation of Kellwood
Company, as amended, incorporated herein by reference
to Form 10-Q for the quarter ended July 31, 1987, SEC
File No. 1-7340.

3.2 - By-Laws, as amended through November 21, 1995,
incorporated herein by reference to Form 10-K for
the fiscal year ended April 30, 1996, SEC File No.
1-7340.

4.1 - Note Purchase Agreement dated December 29, 1986, with
exhibits, incorporated herein by reference to Form
10-Q for the quarter ended January 31, 1987, SEC
File No. 1-7340.

4.2 - Indenture between the Registrant and Centerre Trust
Company of St. Louis, and the 9% Convertible
Subordinated Debentures due 1999, incorporated
herein by reference to Registration Statement on
Form S-2, Registration No. 2-93522, effective
October 18, 1984.

4.3 - Note Agreement dated July 1, 1993, incorporated herein
by reference to Form 10-Q for the quarter ended July
31, 1993, SEC File No. 1-7340.

4.4 - Rights to Acquire Series A Junior Preferred Stock,
pursuant to a Rights Agreement between the
registrant and Centerre Trust Company of St. Louis,
incorporated herein by reference to Registration
Statement on Form 8-A, effective June 24, 1986 and
Amendment dated August 21, 1990, incorporated herein
by reference to Form 10-Q for the quarter ended
October 31, 1990, and Amendment dated May 31, 1996
incorporated herein by reference to Form 8-A/A
effective June 3, 1996, SEC File No. 1-7340.

4.5 - Note Purchase Agreement dated December 1, 1987, with
exhibits, incorporated herein by reference to Form 10-
Q for the quarter ended January 31, 1988, SEC File No.
1-7340.

4.6 - Note Purchase Agreement dated December 15, 1989, with
exhibits, incorporated herein by reference to the
Form 10-Q for the quarter ended January 31, 1990,
SEC File No. 1-7340.

4.7 - Credit Agreement dated as of May 31, 1996 among
Kellwood Company, certain commercial lending
institutions, and The Bank of Nova Scotia, as
Administrative Agent and Syndication Agent, and Bank
of America National Trust and Savings Association,
as documentation Agent, incorporated herein by
reference to Form 10-K for the fiscal year ended
April 30, 1996, SEC File No. 1-7340.

-14-
<PAGE> 15

<CAPTION>
S.E.C. Exhibit
Reference No. Description
- -------------- -----------
<C> <S>
10.2<F*> - Employment Agreement dated December 9, 1992, between
Kellwood Company and William J. McKenna, effective
December 1, 1992, incorporated herein by reference
to the Form 10-Q for the quarter ended January 31,
1993, SEC File No. 1-7340; Amendment dated May 28,
1993, effective May 1, 1993, incorporated herein by
reference to Form 10-K for the fiscal year ended
April 30, 1993, SEC File No. 1-7340; and Amendment
dated November 26, 1996, effective May 1, 1996,
incorporated herein by reference to the Form 10-Q
for the quarter ended January 31, 1997, SEC File No.
1-7340.

10.3<F*> - Form of Employment Agreement dated November 30, 1984,
between Kellwood Company and executive officers,
incorporated herein by reference to Form 10-K for
the fiscal year ended April 30, 1985, SEC File No.
1-7340.

10.4<F*> - 1995 Stock Option Plan For Nonemployee Directors and
1995 Omnibus Incentive Stock Option Plan,
incorporated herein by reference to Appendixes A & B
to the Company's definitive proxy statement dated
July 13, 1995, SEC File No. 1-7340.

10.5<F*> - Executive Deferred Compensation Plan, adopted and
effective as of January 1, 1997; and Executive
Deferred Compensation Plan Amendment, adopted March
18, 1997, filed herewith.

10.6<F**> - Agreement for Services Between Kellwood Company and
Electronic Data Systems Corporation, dated June 21,
1996; and Amendment Regarding Use of Kellwood
Purchase Card by EDS Employees, dated April 29,
1997, filed herewith.

10.7<F*> - Corporate Development Incentive Plan of 1986 (As
Amended) formerly the Key Executive Long-Term
Incentive Plan of 1983, incorporated herein by
reference to Form 10-K for the fiscal year ended
April 30, 1994, SEC File No. 1-7340; and Amendment
dated May 29, 1997, incorporated herein by reference
to Exhibit A to the Company's definitive Proxy
Statement dated July 17, 1997, SEC File No. 1-7340.

13 - Portions of the Annual Report to Shareowners for the
fiscal year ended April 30, 1996, which are
incorporated by reference at Item 1 in Part I, Items
5, 6, 7 and 8 in Part II, and Part IV; filed
herewith.

21 - Subsidiaries of the Company

23 - Consent of Independent Accountants, appearing at page
12 of this report.

24 - Powers of Attorney: Ms. Dickerson and Messrs.
Bentele, Bottum, Genovese, Hunter, Marcus and Wenzel;
filed herewith.

27 - Financial Data Schedule, filed herewith.

<FN>
<F*> Denotes management contract or compensatory plan.

-15-

<PAGE> 1
EXHIBIT 10.5

KELLWOOD COMPANY
EXECUTIVE DEFERRED COMPENSATION PLAN
------------------------------------

(Adopted and Effective as of January 1, 1997)

McDermott, Will & Emery
Chicago, Illinois

<PAGE> 2

ADOPTION
--------
OF
--
KELLWOOD COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN
-----------------------------------------------------

WHEREAS, KELLWOOD COMPANY (the "Company") desires to provide deferred
compensation benefits to certain employees of the Company and its subsidiaries
by adopting an unfunded plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly-compensated
employees, as described in Sections 201(2), 301(a)(3), and 401(a)(1) of the
Employee Retirement Income Security Act of 1974 and in the form attached
hereto;

NOW, THEREFORE, the Company, acting through its duly authorized
representative, hereby adopts the attached plan, entitled the KELLWOOD COMPANY
EXECUTIVE DEFERRED COMPENSATION PLAN, effective as of January 1, 1997.

KELLWOOD COMPANY

By /s/ Leon M. McWhite
--------------------------------------

Dated: 12/3/96

<PAGE> 3
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>

PAGE
----
<S> <C>
SECTION 1 1
Introduction 1
The Plan, the Company 1
Employers 1
Purpose 1
Plan Administration 1

SECTION 2 2
Eligibility for Participation 2
Covered Employee 2
Eligibility 2
Period of Participation 2

SECTION 3 2
Benefits 2
Intent 2
Compensation Deferral Contributions 2
Separate Accounts; Interest 3
Compensation 3
Time of Distribution 4
Acceleration of Payments 4
Change in Control 4

SECTION 4 5
Beneficiaries, Funding 5
Plan Beneficiary 5
Funding 5

SECTION 5 5
General Provisions 5
Employment Rights 5
Interests Not Transferable 5
Controlling Law 5
Gender and Number 6
Action by the Company 6
Successor to the Company or Any Other Employer 6
Facility of Payment 6
Tax Withholding 6
Statement of Accounts 6

SECTION 6 7
Amendment and Termination 7

-i-
<PAGE> 4
PAGE
----
<S> <C>
SECTION 7 7
Claims and Review 7
Claims Procedure 7
Review Procedure 7
</TABLE>

-ii-
<PAGE> 5
KELLWOOD COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN
-----------------------------------------------------

SECTION 1
---------

Introduction
------------

1.1. The Plan, the Company. KELLWOOD COMPANY (the "Company") hereby
- ---------------------------
establishes the KELLWOOD COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN (the
"Plan"), effective as of January 1, 1997 (the "Effective Date").

1.2. Employers. The Company and each other organization that is an
- ---------------
employer under KELLWOOD COMPANY RETIREMENT SAVINGS PLAN ("401(k) Plan") shall be
an "Employer" under this Plan unless specified to the contrary by the Company
by writing filed with the Plan Administrator.

1.3. Purpose. The purpose of this Plan is to provide to eligible employees
- -------------
the opportunity to defer the receipt of current earnings in accordance with
the terms hereof.

This Plan is an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or
highly-compensated employees, as such plans are described in Sections 201(2),
301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of
1974. "Contributions" to the Plan are reflected through credits to bookkeep-
ing accounts that are adjusted periodically to reflect hypothetical investment
earnings. Participants are entitled to receive from the general assets of the
Employers cash payments equal to their account balances, as set forth in the
Plan.

1.4. Plan Administration. The Plan is administered by the Kellwood Company
- -------------------------
Retirement Savings Plan Committee, or by any successor committee that
administers the 401(k) Plan (such Committee is referred to herein as the "Plan
Administrator").

<PAGE> 6
SECTION 2
---------

Eligibility for Participation
-----------------------------

2.1. Covered Employee. For any calendar year, a "Covered Employee" means
- ----------------------
an employee of an Employer under the Plan whose annualized base salary as of the
preceding December 1 (or in the case of a commissioned salesperson, his
annualized calendar compensation for the preceding year based on compensation
through such December 1) exceeds $100,000 (or such greater amount as the Plan
Administrator may determine and announce for any calendar year to reflect cost
of living increases).

2.2. Eligibility. Subject to the conditions and limitations of the Plan,
- -----------------
an employee of an Employer shall become eligible to enroll in this Plan and
shall become a "Participant" on the first day of the calendar year occurring on
or after the Effective Date on which he is a Covered Employee.

2.3. Period of Participation. An employee of an Employer who becomes a
- -----------------------------
Participant in this Plan will continue as a Participant in the Plan in
accordance with its provisions until all benefits to which he is entitled
under the Plan have been distributed to him, but may make compensation
deferral contributions only for such period during which he is a Covered
Employee.

SECTION 3
---------

Benefits
--------

3.1. Intent. Commencing on the Effective Date, the provisions of this
- ------------
Section 3 are intended to allow a Participant to elect to make compensation
deferral contributions.

3.2. Compensation Deferral Contributions.
- -----------------------------------------

-2-
<PAGE> 7

reduced by the amount provided in the election,
and the Employer shall credit such amount to the Participant's
account as provided in subsection 3.3.

(b) An election shall be filed with the Participant's Employer prior
to the calendar year to which such contributions relate.

(c) A Participant's compensation deferral election under this subsec-
tion 3.2 shall apply to Compensation otherwise payable during
the calendar year to which the election specifically relates.

(d) Notwithstanding the foregoing, a Participant's compensation
deferral election automatically shall be revoked for any period
he ceases, in the sole opinion of the Plan Administrator, to be
a member of a select group of management or a highly-compensated
employee.

3.3. Separate Accounts; Interest. The Plan Administrator shall maintain
- ---------------------------------
separate bookkeeping accounts in the name of each Participant to reflect the
Participant's compensation deferral contributions. As of the last day of each
calendar month, a Participant's accounts shall be adjusted as follows:

(a) First, the balance in the Participant's accounts as of the last
day of the prior month shall be increased, in such manner and at
such time as the Plan Administrator shall determine on a uniform
basis, by an amount equal to one-twelfth of the sum of the
"prime rate" plus 1%. The prime rate for this purpose shall be
the rate reported as such in the Wall Street Journal on the
first business day of December of the calendar year immediately
preceding the applicable month.

(b) Next, deferrals which are made during the month shall be credited
to accounts, and each January 31 payments made on or about such
date shall be debited, all in accordance with rules established
by the Plan Administrator.

3.4. Compensation. For purposes of determining a Participant's
- ------------------
compensation deferral contributions, his Compensation shall mean his base salary
(plus in the case of a commissioned salesperson, his commissions) for the
applicable year.

-3-
<PAGE> 8

3.5. Time of Distribution. At the time a Participant first elects to make
- --------------------------
a compensation deferral contribution, he shall also elect to receive his account
either in a lump sum or in annual installments over a period not to exceed ten
years. A lump sum payment shall be made, and installment payments shall
commence, on or about the last business day of January following the calendar
year in which the Participant terminates employment with all Employers. Each
following installment shall be made on or about the last business day of
January of any succeeding year. A Participant may change his election made
under this subsection at any time, but no change in election shall be
recognized if it is filed with the Plan Administrator later than the last day
of the calendar year prior to the year in which the Participant terminates
employment with all Employers.

3.6 Acceleration of Payments. Notwithstanding any other provision of this
- -----------------------------
Plan to the contrary, the Company, in its sole discretion, is empowered to
accelerate the payment of Accounts to a Participant at any time or from time
to time, and without a pre-payment penalty, for any reason the Company may
determine to be appropriate. Neither the Company nor any Employer shall have
any obligation to make any such acceleration for any reason whatsoever.

3.7. Change in Control. Notwithstanding the provisions of subsection 3.5,
- -----------------------
a Participant's entire account balance shall be paid in a lump sum within 30
days after a Change in Control. A Change in Control shall occur if: (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of
securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities or (ii) during any period
of two consecutive years individuals who at the beginning of the two-year
period were members of the Board of Directors of the Company cease for any
reason to constitute at least a majority of such Board.

SECTION 4
---------

Beneficiaries, Funding
----------------------

4.1. Plan Beneficiary. A "Plan Beneficiary" means the person designated by
- ----------------------
a Participant in writing and filed with the Plan

-4-
<PAGE> 9

Administrator prior to the Participant's death. If a Participant has not so
designated a person, or if such person predeceases the Participant, the
Participant's Plan beneficiary shall be the person who is designated as the
Participant's beneficiary under the 401(k) Plan, or if no person is so
designated under the 401(k) Plan, the Participant's spouse, if any, or if the
Participant has no spouse at the time of his death, the Plan Beneficiary shall
be determined pursuant to the beneficiary rules contained in the 401(k) Plan.

4.2. Funding. The Plan is an unfunded plan. Benefits payable under this
- -------------
Plan to a Participant or his Plan Beneficiary shall be paid directly by the
Employers from their general assets.

SECTION 5
---------

General Provisions
------------------

5.1. Employment Rights. Establishment of the Plan shall not be construed
- -----------------------
to give any Participant the right to be retained in the employ of the Company or
any other Employer or to any benefits not specifically provided by this Plan.

5.2. Interests Not Transferable. Except as to withholding of any tax under
- --------------------------------
the laws of the United States or any state or municipality or pursuant to a
valid "domestic relations order," the interests of Participants and their Plan
Beneficiaries in the Plan are not subject to the claims of their creditors and
may not be voluntarily or involuntarily transferred, assigned, alienated or
encumbered. For purposes of this subsection, a valid domestic relations order
shall mean a state court divorce order or property settlement agreement that
is part of a divorce order that directs payment of all or a portion of a Par-
ticipant's accounts in a lump sum, without interest, to the Participant's
spouse, former spouse or children. Except in the case of overpayments under
this Plan, any payment to which a Participant or his Beneficiary is entitled
under this Plan shall not be reduced or offset to reflect any amounts the
Participant or Beneficiary owes an Employer or on account of any other reason,
including without limitation the Participant's or Beneficiary's competition
with an Employer, embezzlement of Employer funds, theft of Employer trade
secrets or violation of confidentiality agreements, unless the Participant or
Beneficiary shall consent in writing to such reduction or offset.

-5-
<PAGE> 10

5.3. Controlling Law. The laws of Missouri shall be controlling in all
- ---------------------
matters relating to the Plan.

5.4. Gender and Number. Where the context admits, words in the masculine
- -----------------------
gender shall include the feminine and neuter genders, the plural shall include
the singular, and the singular shall include the plural.

5.5. Action by the Company. Any action required of or permitted by the
- ---------------------------
Company under the Plan shall be by resolution of the Plan Administrator.

5.6. Successor to the Company or Any Other Employer. The term "Company" as
- ----------------------------------------------------
used in the Plan shall include any successor to the Company by reason of
merger, consolidation, the purchase or transfer of all or substantially all of
the Company's assets, or otherwise. The term "Employer" as used in the Plan
with respect to the Company or any subsidiary shall include any successor to
that corporation by reason of merger, consolidation, the purchase or transfer
of all or substantially all of the assets of that corporation, or otherwise.
After a Change in Control, as defined in subsection 3.7, the benefits of Par-
ticipants and beneficiaries shall be guaranteed by any entity that, directly
or indirectly, owns 50% or more of the outstanding shares of common stock or
the combined voting power of the Company.

5.7. Facility of Payment. Any amounts payable hereunder to any person
- -------------------------
under a legal disability or who, in the judgment of the Plan Administrator, is
unable to properly manage his affairs may be paid to the legal representative
of such person or may be applied for the benefit of such person in any manner
which the Plan Administrator may select. Any payment made in accordance with
the next preceding sentence shall be a full and complete discharge of any
liability for such payment under the Plan.

5.8. Tax Withholding. The Employers may withhold for tax purposes
- ---------------------
(including income tax and FICA) from amounts otherwise payable under this Plan
or from amounts otherwise payable from the Employers to Participants.

5.9. Statement of Accounts. The Plan Administrator shall furnish each
- ---------------------------
Participant with a statement of his accounts under this Plan quarterly or as
otherwise determined by the Plan Administrator.

-6-
<PAGE> 11

SECTION 6
---------

Amendment and Termination
-------------------------

Although the Employers expect to continue the Plan, the Company must
necessarily reserve and reserves the right to amend the Plan from time to time
or to terminate the Plan at any time. However, no amendment of the Plan, nor
the termination of the Plan, may cause the reduction or cessation of any
benefits that were accrued and payable up to the date of such amendment or
termination. With respect to the preceding sentence, an accrued benefit shall
equal amounts allocated to a Participant's accounts prior to the date of the
amendment or termination of the Plan. The Company specifically reserves the
right to amend the amount by which accounts are increased pursuant to subpara-
graph 3.3(b), provided that no such amendment shall reduce a Participant's
account determined under subsection 3.3 as of the date of amendment.

SECTION 7
---------

Claims and Review
-----------------

7.1. Claims Procedure. If a claim for benefits under the Plan is denied in
- ----------------------
whole or in part, the employee will receive written notification. The
notification will include specific reasons for the denial, specific reference
to pertinent Plan provisions, a description of any additional material or
information necessary to process the claim and why such material or
information is necessary, and an explanation of the claims review procedure.
If the Plan Administrator fails to respond within 90 days, the claim is
treated as denied.

7.2. Review Procedure. Within 60 days after the claim is denied or, if the
- ----------------------
claim is deemed denied, within 150 days after the claim is filed, an employee
(or his duly authorized representative) may file a written request with the
Plan Administrator for a review of his denied claim. The employee may review
pertinent documents that were used in processing his claim, submit pertinent
documents, and address issues and comments in writing to the Plan
Administrator. The Plan Administrator will notify the employee of its final
decision in writing. In its response, the Plan Administrator will explain the
reason for the decision, with specific references to pertinent Plan provisions
on which the decision was based. If

-7-
<PAGE> 12

the Plan Administrator fails to respond to the request for review within 60
days, the review is treated as denied.

-8-
<PAGE> 13
AMENDMENT
---------
OF
--
KELLWOOD COMPANY
----------------
EXECUTIVE DEFERRED COMPENSATION PLAN
------------------------------------

WHEREAS, Kellwood Company (the "Company") maintains the
Kellwood Company Executive Deferred Compensation Plan (the
"Plan"); and

WHEREAS, amendment of the Plan is now considered desirable;

NOW, THEREFORE, the Company, acting in accordance with
Section 6 of the Plan, hereby amends the Plan effective
January 1, 1997 as follows:

1. By substituting the following for subsection 3.2 of the
Plan:

"3.2. Compensation Deferral Contributions:
- ------------------------------------------

(a) For any calendar year, a Participant may elect to
make a compensation deferral contribution from his
Compensation in increments of $100 per month, but
not in excess of $5,000 per month. A
Participant's compensation deferral contributions
under this subparagraph 3.2(a) shall be made
pursuant to a compensation deferral election by
which the Participant elects to have his
Compensation reduced by the amount provided in the
election, and the Employer shall credit such
amount to the Participant's account as provided in
subsection 3.3. A Participant's compensation
deferral election under this subparagraph 3.2(a)
shall be filed with the Participant's Employer
prior to the calendar year to which such
contributions relate and shall apply to
Compensation otherwise payable during the calendar
year to which the election specifically relates.

(b) For any year, a Participant may elect to make a
compensation deferral contribution from his Bonus
<PAGE> 14
in increments of whole percentages of his Bonus
but not in excess of the lesser of an amount
designated by the Participant or $60,000. A
Participant's compensation deferral contribution
under this subparagraph 3.2(b) shall be made
pursuant to a compensation deferral election by
which the Participant elects to have his Bonus
reduced by the amount provided in the election,
and the Employer shall credit such amount to the
Participant's account as provided in subsection
3.3. A Participant's compensation deferral
election under this subparagraph (b) shall be
filed with the Participant's Employer prior to the
calendar year in which begins the period over
which the Participant earns the Bonus to which the
election specifically relates. Notwithstanding
the above, however, for the Bonus earned during
the period beginning May 1, 1997 and ending
April 30, 1998 the election shall be filed no
later than April 30, 1997; and with respect to a
Participant who is hired by an Employer during a
period beginning January 1 ending April 30, the
election to make a compensation deferral election
for the Bonus earned beginning in his year of hire
may be filed by April 30 of the year in which he
is hired.

(c) Notwithstanding the foregoing, a Participant's
compensation deferral election automatically shall
be revoked for any period he ceases, in the sole
opinion of the Plan Administrator, to be a member
of a select group of management or a highly-
compensated employee."

2. By substituting the following for subsection 3.4 of the
Plan:

"3.4. Compensation and Bonuses: For purposes of determining a
- -------------------------------
Participant's compensation deferral contributions, his
Compensation shall mean his base salary (plus in the case of a
commissioned salesperson, his commissions) for the applicable
year and his Bonus shall mean amounts earned during the
applicable twelve-month period under the Kellwood Company
<PAGE> 15
Executive Bonus Plan or any other similar plan or plans
designated by the Plan Administrator as being included under this
subsection 3.4."

IN WITNESS WHEREOF, the Company acting through its duly
authorized representative hereby adopts the foregoing amendment
this 18th day of March, 1997.

KELLWOOD COMPANY

By /s/ Leon M. McWhite
----------------------------------
Its Vice President Human Resources
------------------------------

<PAGE> 1
EXHIBIT 10.6

"Confidential Treatment"

Kellwood Company File No. 1-7340
Exhibit 10.6 to Form 10-K

This copy of the Agreement for Services between Kellwood Company and Electronic
Data Systems Corporation is being filed pursuant to the requirements of Item 14
of Form 10-K and Item 601 of Regulation S-K

AGREEMENT

FOR

SERVICES

BETWEEN

KELLWOOD COMPANY

AND

ELECTRONIC DATA SYSTEMS CORPORATION

<PAGE> 2

AGREEMENT
FOR
SERVICES

THIS AGREEMENT FOR SERVICES, dated as of June 21, 1996 (the "Agreement")
is between Kellwood Company, a Missouri corporation, ("Kellwood") and
Electronic Data Systems Corporation, a Delaware corporation ("EDS"). Kellwood
and EDS agree as follows:

ARTICLE I. AGREEMENT, TERM AND DEFINITIONS

1.1 Agreement. During the Term, EDS will supply to Kellwood, and
---------
Kellwood will purchase from EDS, Kellwood's requirements for
those services described in this Agreement, all upon and subject
to the terms and conditions specified in this Agreement.

1.2 Term of Agreement. The term of this Agreement will begin on
-----------------
July 1, 1996 (the "Effective Date") and continue until the eighth
year anniversary of the Effective Date. The date on which this
Agreement expires due to passage of time is referred to in this
Agreement as the "Expiration Date". This Agreement may be
terminated prior to the Expiration Date in accordance with
Article X. The terms and conditions of this Agreement will
govern the period of the Exit Transition (as defined in Section
10.4).

1.3 Defined Terms. As used in this Agreement, the following terms
-------------
have the meanings set forth below.

(a) "Access" means the enjoyment of physical and legal use and
operation of Software in order for EDS to provide Services.

(b) "EDS Software" means any Software which is owned by EDS (and not
proprietary to any other party) and operated by EDS in connection
with the performance of Services.

(c) "EDS-Vendor Software" means any Software which is proprietary to
any party other than EDS or Kellwood and which is licensed to EDS.
EDS-Vendor Software is identified on Schedule 1.3(c).
---------------

(d) "Kellwood Software" means any Software which is owned by Kellwood
(and not proprietary to any other party) and which is to be
operated by or on behalf of Kellwood. Kellwood Software is
identified on Schedule 1.3(d), in accordance with information
---------------
and schedules provided by Kellwood and refined by EDS.

(e) "Kellwood-Vendor Software" means any Software which is proprietary
to any party other than Kellwood or EDS and which is licensed to
Kellwood. Kellwood-Vendor Software is identified on
Schedule 1.3(e), in accordance with information and schedules
---------------
provided by Kellwood and refined by EDS.

(f) "Services" means the services provided by EDS under Article III.

(g) "Software" means computer programs together with input and output
formats, program listings, narrative descriptions, operating
instructions, and supporting documentation and shall include the
tangible media upon which such programs and documentation are
recorded. Except as otherwise provided in this agreement,
Software includes any enhancements, translations, modifications,
updates, new releases, and other changes.

1
<PAGE> 3

(h) "Statement of Work" or "SOW" means that document attached to this
Agreement as Schedule 3.1, in which obligations of EDS and
-------------
Kellwood are set forth in detail.

Other capitalized terms used in this Agreement are defined in the
Agreement from time to time.

ARTICLE II. PERSONNEL AND MANAGEMENT

2.1 Management. During the term of this Agreement, to enable EDS to
----------
perform the Services, EDS and Kellwood will each dedicate sufficient
personnel to carry out its obligations under this Agreement and will
perform those obligations on a timely basis. Account Management will be
provided as described in Schedule 3.1, Statement of Work, at Section
------------
1.6.

2.2 Executive Steering Committee. On or before the Effective Date, EDS
----------------------------
and Kellwood will each give the other written notice of the names of three
members of their respective management staff (inclusive of the EDS
Relationship Executive and the Kellwood Representative), and those six
people will serve on an executive steering committee (the "Executive
Steering Committee"). Kellwood will designate one of its members on
the Executive Steering Committee to act as the chairman of the
Executive Steering Committee. The Executive Steering Committee will be
responsible for (i) generally overseeing the performance of each
party's obligations under this Agreement, (ii) making strategic
decisions for Kellwood in respect of [confidential treatment requested]
for information technology, and (iii) ensuring that EDS is given the
consistent support and environment to use EDS' methodologies to improve
Kellwood's information technology. Kellwood and EDS each may from time
to time replace the members of its management staff serving on the
Executive Steering Committee with other members of its management
staff, except that the EDS Relationship Executive and the Kellwood
Representative will be members of the Executive Steering Committee
throughout the Term. Kellwood and EDS may mutually agree to increase
or decrease the size of the Executive Steering Committee or to change
the qualifications of who may serve on the Executive Steering
Committee.

2.3 Meetings. Within 30 days after the Effective Date, the parties will
--------
mutually determine an appropriate set of periodic meetings to be held
by representatives of Kellwood and EDS. At a minimum, these meetings
will include the following:

(a) A monthly meeting among operational personnel to discuss ongoing
issues relating generally to daily performance and planned or
anticipated activities and changes; and

(b) A quarterly Executive Steering Committee meeting to review the
performance report, the project schedule report, the changes
report, and such other matters as appropriate.

2.4 Transition of Kellwood Personnel.
--------------------------------

(a) On or prior to the Effective Date, EDS will offer employment,
effective the start of business on the Effective Date, to the IS
employees of Kellwood identified in Schedule 2.4 ("Transition of
------------
Kellwood Personnel") at the respective compensation levels set
forth in that Schedule and in accordance with EDS' normal
employment policies.

(b) Kellwood has not and will not make any representation, promise, or
other communication, whether written or oral, to the
Transitionable Employees regarding employment with EDS, or the
employment benefits, plans, or practices of EDS without obtaining
the prior written consent of EDS. Any "stay" bonus offered to a
Transitionable Employee by Kellwood will be the financial
responsibility of Kellwood.

2
<PAGE> 4

2.5 Financial Responsibility for EDS Personnel. EDS will pay for
------------------------------------------
personnel expenses, including wages, of its employees performing the
Services.

2.6 Hiring of Employees. During the Term and for a period of 12 months
-------------------
thereafter, Kellwood will not solicit, directly or indirectly, for
employment or employ any employee of EDS involved in the performance of
EDS Services under this Agreement, without the prior written consent of
EDS; [confidential treatment requested].

2.7 Consents. EDS has acquired prior to the Effective Date any consents,
--------
including third-party consents, which it may be required by any party,
including third parties, to obtain with respect to this Agreement or its
obligations under this Agreement. Kellwood will use reasonable best
efforts to acquire prior to the Effective Date any consents, including
third-party consents, which it may be required by any party, including
third parties, to obtain with respect to this Agreement or its
obligations under this Agreement and, with respect to any such consents
which are not acquired prior to the Effective Date, will acquire such
consents as soon thereafter as possible. Each party will, during the
term of this Agreement, acquire any further such consents which may be
required. When approval, agreement, permission, acceptance, consent or
similar action by either EDS or Kellwood is required by any provision of
this Agreement, such action will not be unreasonably delayed or
withheld.

ARTICLE III. SERVICES TO BE PERFORMED BY EDS

3.1 EDS Services. During the term of this Agreement EDS will provide to
------------
Kellwood the Services described in the Statement of Work attached as
Schedule 3.1 to this Agreement.
------------

3.2 Additional Services. EDS will provide Kellwood such additional
-------------------
services as Kellwood and EDS agree, on terms mutually agreed upon by EDS
and Kellwood in writing (when agreed, "Additional Services"). EDS and
Kellwood will enter into separate task orders (when signed by both
parties, a "Task Order"), which will be governed as Services by the
terms and conditions of this Agreement.

(a) EDS will provide Kellwood a proposal for performing additional
services including a description of and charges for the scope of
work. Kellwood may accept or reject an EDS proposal in its sole
discretion. If Kellwood accepts an EDS proposal, the parties will
negotiate in good faith to agree upon a task order describing the
services, applicable payments and resources, and any additional
terms and conditions.

(b) If Kellwood rejects an EDS proposal, Kellwood will offer EDS the
right of first refusal as described in Section 4.4. If EDS elects
not to exercise that right of first refusal, Kellwood may elect to
perform the services using its employees or outside contractors,
upon written permission of EDS to the extent that such services
involve EDS Equipment, EDS Software or EDS-Vendor Software, so
long as the services do not impair EDS' ability to perform its
obligations under this Agreement. In accordance with Section 2.7,
such permission will not be withheld unreasonably. For a third
party to obtain the right to Access EDS Software, the third-party
will be required to enter into a non-disclosure and non-
competition agreement with EDS. EDS will cooperate with Kellwood
and its employees and/or contractors to permit the performance of
additional services by Kellwood employees or contractors. If such
cooperation requires EDS resources beyond those otherwise provided
for the Monthly Charge (as defined in Section 8.1), the assistance
will be provided as Additional Services, for an additional charge.

3.3 Capacity Requirements. Those Kellwood business units as of the
---------------------
Effective Date which are included in the scope of this Agreement are set
forth on Schedule 3.3 ("Kellwood Business Units"). Services to be
------------
provided under the Statement of Work will account for reasonable
aggregate Kellwood business growth of [confidential treatment requested]
as of the Effective Date, with no individual Kellwood Business Unit
growth greater than

3
<PAGE> 5
[confidential treatment requested] those services. Capacity demand
increase caused by growth of a Kellwood Business Unit greater than
[confidential treatment requested] will be significant and may require a
Change Request (ref. Section 8.3) or Task Order (ref. Section 3.2), as
appropriate.

ARTICLE IV. KELLWOOD OBLIGATIONS

4.1 Facilities and Related Services. At each of its facilities where EDS
-------------------------------
personnel are performing Services, Kellwood will provide EDS with space
comparable to that of Kellwood staff of the same reporting level,
including a conference or other room suitable for a training room,
telephone and office-related equipment, supplies, and parking as EDS
requires in connection with performance of the Services. Kellwood will
provide premises security services in Kellwood's premises and will give
EDS access to such premises 24 hours a day, seven days a week.
Kellwood represents and warrants to, and agrees with, EDS that all
facilities provided by Kellwood under this Agreement (i) are and will
be free of health and safety hazards, (ii) comply with and will be
maintained in compliance with all applicable local, state, and federal
laws, including, but not limited to, the Americans with Disability Act,
and (iii) meet and will meet such reasonable operational, environmental,
and safety requirements as EDS may communicate from time to time to
Kellwood for the proper operation and maintenance of the Services.

4.2 Kellwood Operational Obligations. Kellwood will establish, in
--------------------------------
coordination with EDS, appropriate data processing priorities for
Kellwood. Kellwood will cooperate with EDS by making available, as
reasonably requested by EDS, such facilities, management decisions,
personnel, information, approvals, and acceptances so that EDS may
timely perform Services. Kellwood acknowledges that the performance of
Services by EDS requires the support and cooperation of Kellwood,
including as described in the Statement of Work. Kellwood will
establish measures which will be carefully designed to reinforce
desired outcomes, to help ensure that the Kellwood organization focuses
on and achieves results associated with the services described in this
Agreement.

4.3 Kellwood Financial Obligations. Kellwood will retain responsibility
------------------------------
and pay all costs and expenses including without limitation depreciation
or installment payments as applicable, insurance, maintenance and taxes,
in order for EDS to perform the Services, its expenses for items such
as [confidential treatment requested] (each, a "Kellwood Retained
Expense"). Within 120 days after the Effective Date, Kellwood and EDS
will identify Kellwood Retained Expenses and attach that list to this
Agreement as Schedule 4.3. EDS will assist Kellwood in managing
------------
Kellwood Retained Expenses. In addition to Kellwood Retained Expenses
and any other financial responsibilities of Kellwood expressly provided
in this Agreement, Kellwood will pay all costs and expenses related to
each item which is to be provided by Kellwood hereto and for which the
[confidential treatment requested] the items set forth in Section 4.1.

4.4 Right of First Refusal. During the term of this Agreement, Kellwood
----------------------
hereby grants to EDS a right of first refusal to provide services
similar to those described in the SOW that are not expressly provided
for by this Agreement before obtaining such services from a
third-party. During the first three contract years, this right of
first refusal will apply to services similar to those set forth in
Schedule 3.1, the SOW. From July 1, 1999 throughout the term of this
------------
Agreement, the right of refusal will apply only to information
technology-related services such as those set out in Sections 1 and 2.4 of
the SOW, including areas such as those identified in Sections 1 and 2.4.2
which are not included as of the Effective Date. Kellwood and EDS will
work together in the Request for Proposal process, and EDS will bid at the
same time as third-party bidders. In connection with such right of
first refusal, Kellwood will provide EDS with information relating to
the request by Kellwood for those services (including, but not limited
to, information regarding the time period within which the third party
offered to provide the services and the price at which such services
were offered). Prior to advising Kellwood whether EDS will exercise
right of first refusal, EDS will be permitted the same amount of time
to review such information and material as the third-party was provided
to prepare its offer. EDS may exercise such right of first refusal if
(i) EDS offers to provide such services within the same time period as

4
<PAGE> 6

that proposed by the third-party, and (ii) EDS offers such
services at the same price as, or a better price than, that of the
third-party. If EDS exercises this right of first refusal, Kellwood
will obtain those services from EDS, and, if EDS does not exercise such
right of first refusal, Kellwood may obtain the services from the
third-party. If Kellwood obtains such services from a third-party, any
Software provided by such third-party that will be operated by EDS must
conform to, and be compatible with, the then-current operating
environment in the facilities from which EDS is providing Services and
must be compliant with any applicable EDS operating standards,
confidentiality standards and procedures. In addition, Kellwood will
ensure that any third-party-provided services or Software will not (a)
interfere with the ability of EDS to provide Services or Additional
Services or (b) increase the costs of EDS associated with such
provision of Services and Additional Services.

ARTICLE V. EQUIPMENT AND RELATED AGREEMENTS

5.1 Kellwood-Owned Equipment. During the Term, Kellwood will furnish to
------------------------
EDS, for EDS' use at no charge, the equipment owned by Kellwood that is
listed on the attached Schedule 5.1 in accordance with information
------------
and schedules provided by Kellwood and refined by EDS (the "Kellwood-Owned
Equipment"), which Kellwood-Owned Equipment will remain the property of
Kellwood and a Kellwood Retained Expense.

5.2 Kellwood-Leased Equipment. During the term of this Agreement,
-------------------------
Kellwood will furnish to EDS, for EDS' use at no charge, the equipment
leased by Kellwood that is listed on the attached Schedule 5.2 in
------------
accordance with information and schedules provided by Kellwood and refined
by EDS (the "Kellwood-Leased Equipment"). Kellwood-Leased Equipment is a
Kellwood Retained Expense.

5.3 Third-Party Approvals. Kellwood will take all actions reasonably
---------------------
necessary to obtain any consents, approvals, or authorizations from
third parties necessary for EDS to lawfully access, operate, and use
(at or from any location where Services are to be provided) the
Kellwood-Owned Equipment and the Kellwood-Leased Equipment, including
without limitation the payment of all costs and expenses associated
therewith. Kellwood hereby appoints EDS as its single point of contact
for all matters pertaining to the Kellwood-Owned Equipment and the
Kellwood-Leased Equipment and will promptly notify all appropriate
third parties of such appointment. The Kellwood Representative may at
any time exercise control over EDS' actions with respect to such third
parties.

5.4 Return of Kellwood Equipment. Upon the expiration or termination of
----------------------------
this Agreement, EDS will return each item of Kellwood-Owned Equipment
and Kellwood-Leased Equipment to Kellwood in substantially the same
condition it was in when initially provided to EDS, reasonable wear and
tear excepted.

5.5 Provision of EDS Equipment. "EDS Equipment" means equipment owned or
--------------------------
leased by EDS. Such equipment will be identified on Schedule 5.5.
------------
Notwithstanding the location of the EDS Equipment at a Kellwood
facility or failure to list any item of EDS Equipment on Schedule 5.5,
------------
all right, title and interest in and to any EDS Equipment will be and
remain in EDS, and Kellwood will have no interest in that EDS
Equipment.

(a) Use of EDS Equipment by EDS Employees. The Relationship
-------------------------------------
Executive may provide EDS Equipment for use by EDS employees on
behalf of Kellwood, [confidential treatment requested].

(b) Provision of EDS Equipment to Kellwood. EDS may, upon mutual
--------------------------------------
agreement with Kellwood as to equipment and charges (if any),
provide to Kellwood certain EDS Equipment at mutually agreed
location(s). Kellwood, with the advice of EDS, will prepare and
maintain, at Kellwood's cost and expense, any Kellwood facility in
which the EDS Equipment will be installed in accordance with the
manufacturers' specifications and all applicable codes, statutes,
regulations and standards.

5
<PAGE> 7
(c) Installation of EDS Equipment. EDS will arrange for, and will
-----------------------------
determine the mode of, the transportation and installation of each
item of EDS Equipment to such location(s) as may be mutually
agreed to by the parties. In the event that Kellwood relocates
any Kellwood facility in which EDS Equipment may be installed,
Kellwood will be responsible for the relocation costs of the EDS
Equipment.

(d) Maintenance of EDS Equipment. EDS will be responsible for
----------------------------
maintenance of all EDS Equipment after installation at a Kellwood
location; provided, however, that Kellwood will be responsible for
all costs and expenses of repair or replacement to correct any
damage to EDS Equipment or any part thereof (reasonable wear and
tear excepted) caused by Kellwood, its employees, or its agents or
invitees (exclusive of EDS).

5.6 Return of EDS Equipment. Upon the expiration or any termination of
-----------------------
this Agreement, Kellwood will make the EDS Equipment at any Kellwood
facility available to EDS for pickup; provided, however, that if at
expiration or termination Kellwood is not delinquent in its payments to
EDS under this Agreement, Kellwood may elect to purchase any and all of
the EDS Equipment then located at the Kellwood location(s) from EDS
"WHERE IS" and "AS IS" [confidential treatment requested]. Such right
to purchase will expire (a) if it is not exercised by Kellwood or (b)
if full payment is not received by EDS, in either case, prior to the
date of expiration or termination of this Agreement. EDS will execute
a bill of sale in a form reasonably satisfactory to the parties in
connection with such purchase. Kellwood will expressly assume any ad
valorem property and other taxes and expenses that may be assessed or
payable against the EDS Equipment after title passes to Kellwood. Any
item of EDS Equipment not purchased by Kellwood pursuant to this
Section will be returned to EDS in substantially the same condition it
was in when initially provided to Kellwood, reasonable wear and tear
excepted.

5.7 Kellwood Maintenance Agreements. Kellwood will retain all of
-------------------------------
Kellwood's right, title and interest in and to the agreements listed in
Schedule 5.7 (the "Kellwood Maintenance Agreements") relating to the
------------
maintenance of Kellwood-Owned Equipment and Kellwood-Leased Equipment.
EDS will manage the administration of the Kellwood Maintenance Agreements.
Kellwood represents and warrants to EDS that, as of the Effective Date,
(i) it is not (and, to its knowledge, the provider of the maintenance
services is not) in default in any material respect under any of the
Kellwood Maintenance Agreements and (ii) it will deliver to EDS full
and complete copies of the Kellwood Maintenance Agreements (including
any amendments thereto) prior to the Effective Date.

5.8 Further Assurances. Kellwood and EDS agree to execute and deliver
------------------
such other instruments and documents as either party reasonably requests
to evidence or effect the transactions contemplated by this Article. Upon
EDS' request and at EDS' expense, Kellwood agrees to execute UCC-1
filing statements for EDS Equipment, solely for notice purposes.

ARTICLE VI. SOFTWARE

6.1 Kellwood Software. Kellwood Software will remain Kellwood's property
-----------------
and a Kellwood Retained Expense, and EDS will have no ownership
interests or other rights in the Kellwood Software, except as provided
in this Section. Kellwood grants to EDS the right to Access Kellwood
Software to provide the Services, without charge to EDS, and will pay
all costs and expenses associated with obtaining that right. The
Kellwood Software will be made available to EDS in such form and on
such media as EDS may reasonably request, together with existing
documentation and other materials.

6.2 Kellwood-Vendor Software. On or before the date EDS will begin to
------------------------
access such Software, Kellwood will obtain all consents necessary to
permit EDS to Access the Kellwood-Vendor Software, in writing, and will
pay all costs and expenses associated therewith, if any. Kellwood will
provide written evidence of such

6
<PAGE> 8
consents to EDS upon EDS' request. The Kellwood-Vendor Software will be
made available to EDS in such form and on such media as EDS may
reasonably request, together with appropriate documentation and other
materials. Kellwood-Vendor Software is a Kellwood Retained Expense,
and during the term of this Agreement, Kellwood will pay all required
license, installation, maintenance and upgrade fees with respect to the
Kellwood-Vendor Software. Nothing contained in this Agreement will
require either party to violate the proprietary rights of any
third-party in any Software.

6.3 EDS Software. Software proprietary to EDS which EDS may bring to
------------
Kellwood as EDS Software will remain EDS' property and Kellwood will
have no rights or interests in that EDS Software except that if
Kellwood requests in writing at least six months prior to the
Expiration Date, and Kellwood agrees [confidential treatment
requested], EDS shall grant to Kellwood a perpetual, nontransferable,
nonexclusive license to use, after the Expiration Date, any application
software programs (including existing documentation and source code
required for maintenance) of any EDS Software then being used by EDS in
rendering services to Kellwood (for purposes of this Section, the
"Licensed EDS Programs"), subject to Kellwood and EDS entering into an
agreement, in form and substance reasonably satisfactory to EDS and
Kellwood, containing such terms and conditions as may be appropriate
including, without limitation, the following terms and conditions to
protect the confidentiality of the Licensed EDS Programs:

(a) Operators. Except with the prior written consent of EDS, which
---------
consent will not be unreasonably withheld, or to the extent
required by natural disaster or similar emergency, the Licensed
EDS Programs will not be operated, directly or indirectly, (i) by
persons other than bona fide employees of Kellwood, or (ii) on
equipment that is not under the control of Kellwood. In the
event Kellwood enters into an agreement with a third-party
service provider for provision of services which require Access
to the Licensed Programs, EDS will consent to Access for that
provider to perform services for Kellwood upon that third-party
service provider's executing with EDS a non-disclosure and
non-compete agreement satisfactory to EDS.

(b) Kellwood Work. Except with the prior written consent of EDS,
-------------
which consent will not be unreasonably withheld, only Kellwood
work will be processed utilizing the Licensed EDS Programs. EDS
understands that Kellwood desires to communicate electronically
with vendors, customers and business partners and that such
communication may involve EDS Software and Licensed EDS Programs.
EDS and Kellwood will develop terms and conditions upon which
such vendors, customers and business partners will be provided
Access to EDS Software during the term of this Agreement and,
upon expiration or termination of this Agreement, to Licensed EDS
Programs. All Kellwood vendors, customers and business partners
will have to execute such terms and conditions prior to being
provided Access to EDS Software or Licensed EDS Programs. When
those terms and conditions are developed, a copy will be attached
to this Agreement as Schedule 6.3, ("Third-Party Access to EDS
------------
Software or Licensed EDS Programs").

(c) Confidentiality. Kellwood will keep the Licensed EDS Programs
---------------
confidential, will not at any time allow the Licensed EDS
Programs, or any of their various components or any
modifications, to be disclosed to any party, or sold, licensed,
assigned, leased or commercially exploited or marketed in any
way, with or without charge, by Kellwood or its employees or
agents and, except to the extent required for normal operation of
the Licensed EDS Programs as permitted by this Agreement in the
day to day business operations of Kellwood, Kellwood will not
permit the Licensed EDS Programs to be copied or reproduced, in
whole or in part, by any party at any time.

(d) Irreparable Harm. Kellwood acknowledges that the Licensed EDS
----------------
Programs are the valuable property of EDS, that violation in any
material respect of any provision of the terms of this Agreement
would cause EDS irreparable injury for which it would have no
adequate remedy at law and that EDS shall be entitled to
preliminary and other injunctive relief against any such
violation.

7
<PAGE> 9
Such injunctive relief shall be in addition to, and in no way in
limitation of, any and all other remedies or rights which EDS
shall have at law or in equity.

Kellwood understands that any such Licensed EDS Program will be provided
to Kellwood upon expiration of this Agreement "WHERE IS" and "AS IS"
without ongoing software support or maintenance.

If Kellwood desires EDS to grant use of any EDS Software during the term
of this Agreement to process data for one or more of its vendors,
customers or business partners, EDS will estimate the impact of such
processing upon the then-current Kellwood environment. This estimate
and due diligence will involve determination of capacity demand,
resource level requirements, and impact on EDS' ability to provide
Services to Kellwood as required under this Agreement. If due diligence
pursuant to a Kellwood request for EDS' consent to processing data for a
Kellwood vendor, customer or business partner indicates that additional
capacity or resources will be required to support such processing, EDS
will provide written consent contingent upon [confidential treatment
requested].

6.4 EDS-Vendor Software. EDS will obtain all consents necessary to permit
-------------------
EDS and Kellwood to Access the EDS-Vendor Software during the term of
this Agreement and will pay all costs and expenses associated
therewith. During the term of this Agreement, EDS will pay all
required license, installation, maintenance and upgrade fees with
respect to the EDS-Vendor Software.

6.5 EDS Development Tools. EDS will retain all right, title and interest
---------------------
in and to any and all Software, software development tools, know how,
methodologies, processes, technologies or algorithms used in providing
the Services and the Additional Services which are based upon trade
secrets or proprietary information of EDS or are otherwise owned or
licensed by EDS.

6.6 Software Development Services. If at any time during the term of this
-----------------------------
Agreement, Kellwood requests, or EDS proposes and Kellwood agrees, that
EDS develop Software to be used in Kellwood's business, or that EDS
upgrades or enhances any existing Kellwood Software, EDS Software,
Kellwood-Vendor Software or EDS-Vendor Software, or that EDS implements
any third-party software applications, then the parties will use the
then-current EDS methodology and procedures unless otherwise agreed in
the particular Task Order. Kellwood acknowledges that the obligations
of EDS to perform the development, modifications and enhancements will
be dependent upon Kellwood's performance of those obligations described
in this Section and in the applicable Task Order. From time to time as
may be necessary, Kellwood will provide EDS with access to those
employees and customers of Kellwood, including management personnel and
Software users, from whom EDS requires information.

(a) Approval Procedures.
-------------------

(i) For Phases other than the Testing Phase. A joint EDS and
---------------------------------------
Kellwood team will be created for each project. That joint
team will develop a project plan requiring key checkpoints.
Once the joint team has reached concurrence as to each
checkpoint, the team will present that portion of the
project to Kellwood for approval. To the extent that any
portion of any phase (other than the testing phase) of the
then-current EDS methodology or a particular project plan
requires approval by Kellwood beyond the project team level,
EDS will at the time of delivery of such portion state in
writing a reasonable period of time (in no case to be less
than 10 business days) (the "Review Period") within which
such portion shall be approved by Kellwood or rejected, in
writing. If Kellwood does not reject or approve in writing
within the Review Period, the deliverable or product in
question shall be deemed approved, unless Kellwood and EDS
have agreed in advance that a software development service
is a major project and will require actual written approval
by Kellwood. If any deliverable or product is rejected,
Kellwood shall state in writing the specific reasons for
rejection, and EDS shall make the appropriate changes and
redeliver the revised deliverable or product, again stating

8
<PAGE> 10
in writing the appropriate Review Period, which may in many
instances be a shorter period of time than was designated as
the initial Review Period. Work on any subsequent phase
will not commence until the deliverables for the prior phase
have been approved in writing or deemed approved.

(ii) For the Testing Phase. On completion of the testing phase
---------------------
of the then-current EDS methodology and within ten working
days thereafter (or such other period as the parties may
agree), Kellwood will:

(A) accept the Developed Software by providing EDS
with written notice of such acceptance, if the
Developed Software substantially conforms to the
testing requirements, or

(B) reject the Developed Software, if the Developed
Software does not substantially conform to the
testing requirements, by providing EDS with
written notice of such rejection which specifies
the manner in which Kellwood believes that the
Developed Software does not conform.

(b) Warranty to Conform to Business and Technical Design Document.
-------------------------------------------------------------
EDS warrants that the portions of the Developed Software
developed by EDS will substantially conform to the business
and technical design document [confidential treatment
requested]of that Developed Software. Kellwood and EDS will
identify any Developed Software that will not be utilized in
a production environment during [confidential treatment
requested] following its implementation and will agree upon
a reasonable start date for [confidential treatment
requested].

(i) Remedy. The parties expressly acknowledge and agree that
------
notwithstanding anything to the contrary in this Agreement,
Kellwood's sole and exclusive remedy for any breach of the
warranty set forth in this Section will be the correction by
EDS of any defects of the Developed Software that cause it
not to substantially conform to the applicable business and
technical design document or, at EDS' sole discretion, the
refund by EDS to Kellwood of the charges paid for its
development. [confidential treatment requested] EDS will
provide, at no charge to Kellwood, such corrections to the
Developed Software as may be necessary to make it
substantially conform to the Business and Technical Design
Document, provided that Kellwood provides, or causes to be
provided to EDS, (i) access, in a timely manner, to the
Developed Software and associated equipment necessary for
EDS to complete such work and (ii) the information specified
in this Section. Kellwood will notify EDS in writing of any
defects in the Developed Software that cause it not to
substantially conform to the applicable business and
technical design document and will provide EDS with adequate
information to identify the circumstances in which such
nonconformance is discovered. EDS will correct such
nonconformance and furnish Kellwood with revised or updated
Developed Software documentation reflecting any corrections
made to the Developed Software pursuant to this Section.

(ii) Exceptions. Should Kellwood or any party other than EDS
----------
or its agents perform maintenance on, or make any
modifications or enhancements to, the Developed Software, the
warranty described in this Section will automatically be void.
If the nonconformance arises as a result of Kellwood's act or
omission or the malfunction of any equipment,
Kellwood-supplied Software or third-party software, EDS will
be entitled to compensation based upon EDS' then-standard
commercial rates for all efforts by EDS to diagnose and
repair any such non-conformance.

9
<PAGE> 11

6.7 Developed Software. "Developed Software" means all Software developed
------------------
by EDS, EDS agents or EDS subcontractors pursuant to this Agreement.

(a) Developed Software [confidential treatment requested]. Prior to
-----------------------------------------------------
commencement of developing any Developed Software, Kellwood and
EDS will execute a Change Request (ref. Section 8.3) or Task Order
(ref. Section 3.2), as appropriate, [confidential treatment
requested].

(b) Grant of License. As to Developed Software [confidential
----------------
treatment requested], EDS will grant to Kellwood an irrevocable,
perpetual, world-wide, royalty-free, nonexclusive license to both
object code and source code of the Developed Software, effective
as of the date of its implementation; provided, however, that
except with the prior written consent of EDS, which consent will
not be unreasonably withheld, or to the extent required by natural
disaster or similar emergency, the Developed Software will not be
operated, directly or indirectly, (i) by persons other than
bona fide employees of Kellwood, or (ii) on equipment that is not
under the control of Kellwood. In the event Kellwood enters into
an agreement with a third-party service provider for provision of
services which require Access to the Developed Software, EDS will
consent to Access for that provider to perform services for
Kellwood upon that third-party service provider's executing with
EDS a non-disclosure and non-compete agreement satisfactory to
EDS. Kellwood agrees that, except with the prior written consent
of EDS as described in sub-Section 6.7(c), only Kellwood work
shall be processed utilizing Developed Software. Kellwood agrees
that it will keep the Developed Software confidential, will not at
any time allow the Developed Software, or any of the various
components thereof or any modifications thereto, to be disclosed
to any party, or to be sold, licensed, assigned, leased or
commercially exploited or marketed in any way, with or without
charge, by Kellwood or its employees or agents and, except to the
extent required for normal operation of the Developed Software as
permitted in this Agreement in the day to day business operations
of Kellwood, will not permit the Developed Software to be copied
or reproduced, in whole or in part, by any party at any time.

(c) Use of Kellwood License to Process Data for Kellwood Vendor,
-----------------------------------------------------------
Customer or Business Partner. If Kellwood desires to use the
----------------------------
license granted in sub-Section 6.7(b) to process data for one or
more of its vendors, customers or business partners, EDS will
estimate the impact of such processing upon the then-current
Kellwood environment. This estimate and due diligence will
involve determination of capacity demand, resource level
requirements, and impact on EDS' ability to provide Services to
Kellwood as required under this Agreement. If due diligence
pursuant to a Kellwood request for EDS' consent to processing data
for a Kellwood vendor, customer or business partner indicates that
additional capacity or resources will be required to support such
processing, EDS will provide written consent contingent upon
Kellwood and EDS carrying out Additional Services to support such
processing.

(d) EDS' Provision of Services. If Kellwood's processing of its
--------------------------
vendors', customers' or business partners' data, whether using
Developed Software or Kellwood Software, substantially interferes
with EDS' ability to provide Services, the consequences of that
interference on EDS performance will not be a cause for
termination of this Agreement.

6.8 Residual Knowledge and Independent Development. Notwithstanding
----------------------------------------------
anything in this Agreement to the contrary, either party shall be free
to use the ideas, concepts, or know-how developed by it during the
performance of Services that are in non-tangible form and may be
retained by its employees. Each party retains all right, title and
interest in and to any and all Software, software development tools,
know how, methodologies, processes, technologies or algorithms used to
perform under this Agreement which are based upon its trade secrets or
its proprietary information or otherwise owned or licensed by it.
Notwithstanding anything in this Agreement to the contrary, either
party may acquire, license, market, distribute, develop for

10
<PAGE> 12
itself or others, or have others develop for it, similar technology
performing the same or similar functions as the technology contemplated
by this Agreement.

ARTICLE VII. CONFIDENTIALITY, SECURITY AND AUDIT RIGHTS

7.1 Kellwood's Data. Information relating to Kellwood or its customers
---------------
contained in Kellwood's data files ("Kellwood's Data") is the exclusive
property of Kellwood. EDS is authorized to have access to and make use
of Kellwood's Data as appropriate for the performance by EDS of its
obligations under this Agreement. Upon the termination or expiration
of this Agreement, EDS will return to Kellwood all of Kellwood's Data
in EDS' then existing machine-readable format and media. Kellwood will
provide written instruction to EDS as to disposition of that data. EDS
will not use Kellwood's Data for any purpose other than providing the
Services or Additional Services.

7.2 Facilities Security. EDS will comply with the written security
-------------------
procedures that are in effect at the Kellwood premises on the Effective
Date. EDS will also institute such additional security procedures at
the Kellwood premises as Kellwood reasonably requests as an Additional
Service. Kellwood will provide all necessary security personnel and
related equipment at the Kellwood premises. Except (a) as is necessary
in the conduct of Kellwood's business, including Kellwood's compliance
hereunder, and (b) as is necessary to comply with the rights of third
parties, without the prior consent of EDS no employee, agent,
contractor or invitee of Kellwood will operate or assist in operating
equipment or Software to be used by EDS under this Agreement or enter
any room where any such equipment or Software is located.

7.3 Audit Rights. EDS will provide Kellwood auditors and inspectors that
------------
Kellwood designates in writing with access to Kellwood facilities where
EDS is performing Services, including but not limited to the corporate
data center, for the purpose of performing audits or inspections of
Kellwood's business. EDS will provide reasonable assistance of a
routine nature to such auditors and inspectors, and EDS will provide
additional assistance as an Additional Service.

ARTICLE VIII. PAYMENTS TO EDS

8.1 Charges for Services.
--------------------

(a) Base Services and the IBS Program for Change. In consideration
--------------------------------------------
for the performance by EDS of the Base Services and the IBS
Program for Change described in the SOW, Kellwood will make
payments to EDS as set forth in Schedule 8.1(a), "Estimated
---------------
Monthly Charges." Each such payment will be a "Monthly Charge."

(b) Shared Savings. EDS is investing in this relationship with
--------------
Kellwood by providing its resources and the resources of its
subsidiary A.T. Kearney in performing Services for the Supplier
Management and the Warehousing/Distribution/Logistics Programs for
Change. EDS is risking compensation for those Services upon
Kellwood's achieving and sharing savings as described in this sub-
Section. For purposes of this Agreement:

* "FY" means the 52-week fiscal year used to report Kellwood's
annual financial results ending April 30.

* "FY 1" means that partial fiscal year from the Effective Date
through April 30, 1997.
* "FY 2" means May 1, 1997 through April 30, 1998.
* "FY 3" means May 1, 1998 through April 30, 1999.

11
<PAGE> 13
(i) Realized Savings. Kellwood and EDS will measure realized
----------------
savings [confidential treatment requested] in the areas of
(i) supplier management, (ii)
warehousing/distribution/logistics, and (iii) [confidential
treatment requested] (the "Realized Savings"). Realized
Savings are actual savings achieved after the Effective
Date. [confidential treatment requested]. Realized
Savings will be calculated monthly and paid out on the 30th
of each May, August, November and February [confidential
treatment requested]. It is the intention of the parties
that Realized Savings be paid out as follows.

(ii) Savings Realized During FYs 1, 2 and 3. [confidential
--------------------------------------
treatment requested]. Thereafter through FY 3, Kellwood and
EDS will share as follows:
<TABLE>
<S> <C>
[confidential treatment requested] [confidential treatment requested]
In excess of: Up to: To Kellwood To EDS
------------ ----- ----------- ------
$[confidential treatment requested] [confidential treatment requested]
$[confidential treatment requested] [confidential treatment requested]
$[confidential treatment requested] [confidential treatment requested]
</TABLE>

(iv) [confidential treatment requested]. The monthly
amount [confidential treatment requested] during the
remaining term of the Agreement in [confidential treatment
requested] will be determined by [confidential treatment
requested] the cumulative Realized Savings for FYs 1, 2 and
3 as follows:

The monthly charge, if any, will be based on [confidential
treatment requested]:
<TABLE>
<S> <C>
[confidential treatment requested] [confidential treatment requested]
(in Millions)
$[confidential treatment requested] [confidential treatment requested]
$[confidential treatment requested] [confidential treatment requested]
$[confidential treatment requested] [confidential treatment requested]
</TABLE>

If [confidential treatment requested], then, contingent upon
EDS continuing to provide Services under this Agreement,
beginning with May, 1999, each month during the term
Kellwood will pay EDS an amount equal to [confidential
treatment requested].

(v) Measurement of Savings. For effective measurement of
----------------------
savings in the area of supplier management, Kellwood and EDS
will:
[confidential treatment requested], and
Establish a firm date as the starting point for the
initiative, represented by [confidential treatment
requested], and count all improvements after that date as a
result of the sourcing effort.
For measurement in the areas of
warehousing/distribution/logistics and [confidential
treatment requested], Kellwood and EDS will [confidential
treatment requested] on an ongoing basis.

(vi) Commitment. As set forth in Section 4.2, Kellwood will
----------
establish measures which will be carefully designed to
reinforce desired outcomes, to help ensure that the
Kellwood organization focuses on and achieves results
associated with the services described in this Agreement.

8.2 Charges for Additional Services. Charges for Additional Services will
-------------------------------
be as set forth in the applicable Task Order.

12
<PAGE> 14
8.3 Change Requests. [confidential treatment requested] and will be
---------------
addressed in change orders using a mutually agreeable change control
process, [confidential treatment requested].

8.4 Reimbursable Expenses. Travel expenses incurred by EDS in support of
---------------------
[confidential treatment requested]. Kellwood will pay, or reimburse EDS
for, [confidential treatment requested] expenses incurred by EDS with
Kellwood's specific approval.

8.5 Cost of Living Adjustment.
-------------------------

(a) Adjustment. "CPI" means the Consumer Price Index for all Urban
----------
Consumers, U.S. City Average, for All Items (1982-84 = 100), as
published in the Bureau of Labor Statistics of the Department of
Labor. [confidential treatment requested] The CPI as of the
[confidential treatment requested] anniversary of the Effective
Date, July 1, [confidential treatment requested], will be the
"Initial Base Index." If the CPI shall on the [confidential
treatment requested] anniversary or any subsequent anniversary of
the Effective Date (each, a "Current Index") be higher than the
Initial Base Index or the highest CPI at any previous anniversary
of the Effective Date after July 1, [confidential treatment
requested] (such highest CPI, the "Base Index"), then, effective
as of such anniversary, [confidential treatment requested] under
this Agreement attributable to the period following such
anniversary date [confidential treatment requested], as
previously adjusted pursuant to this Section, shall be increased
[confidential treatment requested] that the Current Index
increased from the Base Index. If on the third or any subsequent
anniversary of the Effective Date the Current Index shall exceed
the Base Index by greater than [confidential treatment requested]
percentage points, then Kellwood and EDS will agree upon a
reasonable resolution with regard to the percentage point(s) by
which the increase exceeded [confidential treatment requested]
percentage points.

(b) Change of Index. In the event that the Bureau of Labor
---------------
Statistics should stop publishing the CPI or should substantially
change the content or format thereof, EDS and Kellwood
shall substitute therefor another comparable measure
published by a mutually acceptable source; provided,
however, that if such change is merely to redefine the base
year for the CPI from 1982-84 to some other year, the
parties shall continue to use the CPI but shall, if
necessary, convert either the Base Index or the Current
Index to the same basis as the other by multiplying such
index by the appropriate conversion factor.

8.6 Time of Payment. Any sum due EDS under this Agreement or which a time
---------------
for payment is not otherwise specified will be due and payable 30 days
from the EDS invoice date. Any sum due EDS under this Agreement that
is not paid when due shall bear interest from its due date until paid
at the lesser of (a) [confidential treatment requested] percent per
annum more than the prime rate established from time to time by
Citibank, New York N.A., or (b) the maximum rate of interest allowed by
applicable law.

8.7 Taxes. Kellwood will be responsible for payment of taxes on services
-----
under this Agreement, and if those taxes are paid by EDS, Kellwood
shall pay to EDS, amounts equal to any taxes, however designated or
levied, based upon EDS' charges, or upon this Agreement or the
Software, services or items provided under this Agreement by EDS, or
their use, including state and local sales, use, privilege or excise
taxes based on gross revenue, and any taxes or amounts in lieu thereof
paid or payable by EDS in respect of the foregoing, exclusive, however,
of franchise taxes and taxes based on net income of EDS.

8.8 Verification of Costs. The terms set forth in this Agreement are
---------------------
based upon information furnished by Kellwood to EDS. Kellwood believes
that such information is accurate and complete. However, if any such
information should prove to be inaccurate or incomplete in any material
respect, EDS and Kellwood will make appropriate adjustments to the
provisions hereof including without limitation the charges for Services
provided by EDS.

13
<PAGE> 15

ARTICLE IX. DISPUTE RESOLUTION

9.1 Annual Quality Review. At least annually, EDS and Kellwood will meet
---------------------
to review the performance of their obligations under this Agreement.

9.2 Performance Review. During the course of the long-term relationship
------------------
provided for in this Agreement, disputes, controversies or claims may
arise between the parties. The parties intend that the EDS
Relationship Executive and the Kellwood Representative resolve a
dispute, controversy or claim. In addition, to minimize the expense to
and impact on each party of formally resolving such disputes,
controversies and claims, the Executive Steering Committee will meet
regularly to review the performance of each party of its obligations
under this Agreement. If the parties are unable to resolve a dispute,
controversy or claim through this process, then upon the written
request of either party, each party will appoint an officer whose task
it will be to meet for the purpose of resolving the dispute,
controversy or claim. Such officers will discuss the dispute,
controversy or claim and negotiate a resolution in good faith, without
the necessity of any formal proceeding relating thereto. No formal
proceedings for the resolution of such dispute, controversy or claim
may be commenced until either or both of the appointed officers
conclude in good faith that amicable resolution through continued
negotiation of the matter is not likely. Except where clearly
prevented by the area in dispute, both parties agree to continue
performing their respective obligations under this Agreement while the
dispute is being resolved unless and until such obligations are
terminated or expire in accordance with the provisions of this
Agreement.

9.3 Arbitration.
-----------

(a) Procedures. Any dispute, controversy or claim arising out of or
----------
related to this Agreement, or the creation, validity,
interpretation, breach or termination of this Agreement, that the
parties are unable to resolve through informal discussions or
negotiations pursuant to Section 9.2 will be submitted to binding
arbitration using the following procedure:

(i) The arbitration will be held in St. Louis (if initiated by
Kellwood) or Dallas (if initiated by EDS) before a panel of
three arbitrators. Either party may demand arbitration in
writing, by serving on the other party a statement of the
dispute, controversy or claim, and the facts relating or
giving rise thereto, in reasonable detail, and the name of
the arbitrator selected by it.

(ii) Within 30 days after such demand, the other party will name
its arbitrator, and the two arbitrators named by the parties
will, within 60 days after such demand, select the third
arbitrator.

(iii) The arbitration will be governed by the Commercial
Arbitration Rules of the American Arbitration Association
(the "AAA"), except as expressly provided in this Section.
However, the arbitration will be administered by any
organization mutually agreed upon by the parties. If the
parties are unable to agree upon the organization to
administer the arbitration, it will be administered by the
AAA. The arbitrators may not amend or disregard any
provision of this Section.

(iv) The arbitrators will allow such discovery as is appropriate
to the purposes of arbitration in accomplishing fair,
speedy and cost effective resolution of disputes. The
arbitrators will reference the rules of evidence of the
Federal Rules of Civil Procedure then in effect in setting
the scope and direction of such discovery. The arbitrators
will not be required to make findings of fact or render
opinions of law.

(v) The decision of and award rendered by the arbitrators will
be final and binding on the parties. Judgment on the award
may be entered in and enforced by any court of competent
jurisdiction.

14
<PAGE> 16

(b) Enforcement. Other than those matters involving injunctive
-----------
relief as a remedy, or any action necessary to enforce the award
of the arbitrators, the provisions of this Section are a
complete defense to any suit, action or other proceeding
instituted in any court or before any administrative
tribunal with respect to any dispute, controversy or claim
arising out of or related to this Agreement or the
creation, validity, interpretation, breach or termination
of this Agreement. The provisions of this Section will
survive the expiration or termination of this Agreement for
any reason. Nothing in this Section prevents the parties
from exercising the termination rights set forth in this
Agreement.

(c) Services during Arbitration. Unless EDS is bringing an action
---------------------------
under this Section for nonpayment by Company, EDS will
continue to provide the Services, and Company shall
continue to make payments to EDS, in accordance with this
Agreement during the arbitration proceedings.

9.4 Performance During Negotiations or Arbitration. Where there is a
----------------------------------------------
dispute between the parties which is the subject of negotiations as
contemplated by Section 9.2 or is the subject of arbitration
proceedings as contemplated by Section 9.3, both parties shall continue
to perform their obligations under this Agreement during such
negotiations or arbitration proceedings.

9.5 Escrow of Disputed Payments. In accordance with Section 9.4 Kellwood
----------------------------
will continue to pay EDS all undisputed sums during negotiations or
arbitration. Any fees, charges or other amounts which are the subject
of any dispute between Kellwood and EDS shall be deposited by the party
owing such amounts into an escrow account at a bank reasonably
acceptable to Kellwood and EDS pending resolution of the underlying
dispute with interest to accrue on the corpus and to be allocated to
the party or parties ultimately entitled to all or any part of the
corpus.

ARTICLE X. TERMINATION

10.1 Termination for Cause. If either party materially defaults in the
---------------------
performance of any of its obligations (except for a default by Kellwood
in its obligation to pay EDS) under this Agreement, which default shall
not be substantially cured within [confidential treatment requested]
days after written notice is given to the defaulting party specifying
the default, or, with respect to any default which cannot reasonably be
cured within [confidential treatment requested] days, if the defaulting
party fails to proceed within [confidential treatment requested] days
to commence curing said default and thereafter to proceed with all due
diligence to substantially cure that default, then the party not in
default, by giving written notice to the defaulting party, may
terminate this Agreement as of a date specified in the notice of
termination.

10.2 Termination for Nonpayment. If Kellwood defaults in the payment when
--------------------------
due of any undisputed amount due to EDS and does not cure such default
within [confidential treatment requested] days after being given
written notice of such default, then EDS, by giving written notice
thereof to Kellwood, may terminate this Agreement as of a date
specified in such notice of termination.

10.3 Termination for Insolvency. Subject to the provisions of Title 11,
--------------------------
United States Code, if either party becomes or is declared insolvent or
bankrupt, is the subject of any proceedings relating to its
liquidation, insolvency or for the appointment of a receiver or similar
officer for it, makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an agreement for the
composition, extension, or readjustment of all or substantially all of
its obligations, then the other party, by giving written notice to such
party, may terminate this Agreement as of a date specified in such
notice of termination.

10.4 Exit Transition Services.
------------------------

(a) Services. In connection with the termination of this Agreement
--------
at the Expiration Date or by Kellwood pursuant to Section 10.1 or
10.3, EDS will comply with Kellwood's reasonable directions to cause
the orderly transition and migration to Kellwood from EDS of all
Services and Additional Services then being performed by EDS (the
"Exit Transition"). Kellwood, its employees, and agents

15
<PAGE> 17

will cooperate in good faith with EDS in connection with EDS'
obligations under this Section and Kellwood will perform its
obligations under the Transition Plan (as defined below).

(i) EDS and Kellwood will work together to develop a transition
plan (the "Transition Plan") setting forth the respective
tasks to be accomplished by each party in connection with
the orderly transition and a schedule pursuant to which the
tasks are to be completed.

(ii) EDS will determine with Kellwood the level of training
appropriate for Kellwood employees who will be assuming
responsibility for operation of the Software following the
Exit Transition and [confidential treatment requested].

(iii) Kellwood will have the right to [confidential treatment
requested]. With EDS' consent Kellwood will have the right
to [confidential treatment requested] on the date of
termination.

To the extent EDS can accomplish the Exit Transition services with
its resources at Kellwood facilities as of the date of
expiration or termination, there will be no additional
charge to Kellwood. If additional resources are required
to provide the Exit Transition services, EDS will provide
those services at then-current commercial rates.

(b) Continued Payment of Charges. For so long as this Agreement
----------------------------
remains in effect and during the Exit Transition, Kellwood will
pay EDS the charges set forth in Article VIII and elsewhere in
this Agreement.

ARTICLE XI. WARRANTIES, INDEMNITIES AND LIABILITY

11.1 Warranty and Disclaimer
-----------------------

(a) In all cases where EDS has not committed to a specific performance
standard, EDS will provide the Services in accordance with
industry practices and standards generally applicable for such
Services at the time the Services are rendered.

(b) While EDS is primarily providing services to Kellwood under this
Agreement, EDS may from time to time provide certain hardware,
Software and other items as an incidental part of the Services.
With the exception of manufacturers' or licensors' warranties
which EDS is able to pass through for Kellwood's benefit, such
hardware, Software and other items are provided on an "AS IS"
basis without warranty. In all cases where EDS has not committed
to a specific performance standard, EDS will use reasonable care
in providing services.

(c) EXCEPT AS SPECIFICALLY STATED IN THIS AGREEMENT, EDS
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, REGARDING ANY MATTER, INCLUDING THE
MERCHANTABILITY, SUITABILITY, ORIGINALITY, FITNESS FOR
A PARTICULAR USE OR PURPOSE, OR RESULTS TO BE DERIVED
FROM THE USE OF ANY HARDWARE, SOFTWARE OR OTHER ITEMS
PROVIDED UNDER THIS AGREEMENT.

11.2 Cross Indemnification.
---------------------

(a) EDS and KELLWOOD each shall be responsible for damages to their
respective tangible personal or real property (whether owned or
leased), and each party agrees to look only to its own insuring
arrangement (if any) with respect to such damages, unless such
damages have been caused by the reckless misconduct of the other
party.

16
<PAGE> 18

(b) EDS and KELLWOOD each shall be responsible for claims for the
death of or personal injury to any person (including any employee
of either party), and claims for damages to any third party's
tangible personal or real property (whether owned or leased), in
accordance with the common law of the jurisdiction in which such
claim occurred. Each party shall indemnify, defend and hold
harmless the other party from any and all claims, actions,
damages, liabilities, costs and expenses, including without
limitation, reasonable attorneys' fees and expenses, arising out
of claims for which the indemnitor is responsible under the
preceding sentence.

11.3 Infringement Indemnity. For purposes of this Section, "Licensed
----------------------
Program" means the Software that one party ("Indemnitor") licenses to
the other party ("Indemnitee") or to which Indemnitor provides
Indemnitee Access. Each party will defend any action brought or
threatened against the other party to the extent that such action is
based on a claim that a Licensed Program, used within the scope of the
rights granted in this Agreement, (i) infringes a copyright enforceable
in the United States, (ii) infringes a United States patent, or (iii)
constitutes misappropriation or unlawful disclosure or use of another
party's trade secret under United States law. Indemnitor will bear the
expense of such defense and pay any damages and attorneys' fees finally
awarded by a court of competent jurisdiction which are attributable to
such claim, provided that Indemnitee notifies Indemnitor promptly in
writing of the claim and that Indemnitee allows Indemnitor to fully
direct the defense or settlement of such claim. Indemnitor shall not
be responsible for any settlement or compromise made without its
consent. Should the Licensed Program become, or in Indemnitor's
opinion be likely to become, the subject of a claim of infringement of
a copyright or patent, Indemnitor will, at its option, attempt to
procure for Indemnitee the right to continue using the Licensed
Program, or replace or modify the Licensed Program to make its use
hereunder non-infringing. If neither option is reasonably available in
Indemnitor's judgment, then (i) at Indemnitor's request, Indemnitee
shall return the Licensed Program to Indemnitor and (ii) the rights
granted to the other party in such Licensed Program hereunder shall
terminate. Indemnitor shall have no liability to Indemnitee hereunder
if any claim of infringement is based upon the use of the Licensed
Program delivered hereunder in connection or in combination with
equipment, devices or software not supplied by Indemnitor under this
Agreement or used in a manner for which the Licensed Program was not
designed. Moreover, Indemnitor shall have no liability if Indemnitee
modifies any Licensed Program provided by Indemnitor under this
Agreement and such infringement would not have occurred but for such
modification, or uses the Licensed Program in the practice of a
patented process and there would be no infringement in the absence of
such practice, or such claim arises out of Indemnitor's compliance with
specifications provided by Indemnitee to Indemnitor and such
infringement would not have occurred but for such compliance. This
Section states Indemnitor's entire obligation to Indemnitee regarding
infringement.

11.4 Indemnification of EDS for Certain Third-Party Claims. Without
-----------------------------------------------------
limiting EDS' liability to Kellwood for nonperformance under this
Agreement, each of the parties acknowledge and agree that by entering into
and performing its obligations under this Agreement, EDS will not assume
and should not be exposed to the business and operational risks
associated with Kellwood's business. Therefore Kellwood agrees to
indemnify, defend and hold EDS harmless, from any and all damages,
liabilities, costs, and expenses, including without limitation,
reasonable attorneys' fees and expenses, arising out of, under or in
connection with any claim, demand, charge, action, cause of action or
other proceeding relating to Kellwood's conduct of Kellwood's business,
including without limitation, the acquisition and use by Kellwood of
the products, Services and Additional Services to be provided by EDS
under this Agreement.

11.5 Indemnification Procedures.
--------------------------

(a) Notice and Control. The indemnification obligations set forth
------------------
in this Article shall not apply unless the party claiming
indemnification:

(i) Notifies the other promptly of any matters in respect of
which the indemnity may apply and of which the notifying
party has knowledge, in order to allow the indemnitor the
opportunity to investigate and defend the matter; provided
that, the failure to so notify shall only relieve the
indemnitor of its obligations under this Article if and to
the extent that the indemnitor is prejudiced thereby; and

17
<PAGE> 19

(ii) Gives the other party full opportunity to control the
response thereto and the defense thereof, including,
without limitation, any agreement relating to the
settlement thereof; provided that, the indemnitee will have
the right to participate in any legal proceeding to contest
and defend a claim for indemnification involving a
third-party and to be represented by legal counsel of its
choosing, all at the indemnitee's cost and expense.

(b) Settlement. The indemnitor shall not be responsible for any
----------
settlement or compromise made without its consent. The indemnitee
agrees to cooperate in good faith with the indemnitor at the
request and expense of the indemnitor.

11.6 Limitation of Liability. In the event EDS shall be held liable to
-----------------------
Kellwood, for any matter arising out of, under, or in connection with
this Agreement, whether based on an action or claim in contract,
equity, negligence, tortuous misconduct or otherwise, the amount of
damages recoverable against EDS for all events, acts or omissions shall
not exceed in the aggregate [confidential treatment requested] (i)
[confidential treatment requested] or (ii) the total amount of the
charges paid by Kellwood to EDS under this Agreement (excluding
payments for taxes or reimbursable expenses) during the [confidential
treatment requested] during Which payments were made immediately
preceding the date the first such claim or action arose. In no event
will the measure of damages payable by EDS include, nor will EDS be
liable for, any amounts for loss of income, profit or savings or
indirect, incidental, consequential, or punitive damages of any party,
including third parties. The provisions of this Section will survive
the term or termination of this Agreement for any reason.

11.7 Contractual Statute of Limitations. No claim and demand for
----------------------------------
arbitration or cause of action which arose out of an event or events which
occurred more than two years prior to the filing of a demand for
arbitration or suit alleging a claim or cause of action may be asserted by
either party against the other party.

11.8 Acknowledgment. EDS and Kellwood each acknowledge that the
--------------
limitations and exclusions contained in this Article have been the subject
of active and complete negotiation between the parties and represent the
parties' agreement based upon the level of risk to EDS and Kellwood
associated with their respective obligations under this Agreement and
the payments to be made to EDS under this Agreement.

ARTICLE XII. MISCELLANEOUS

12.1 Right of EDS to Engage in Other Activities. Nothing in this Agreement
------------------------------------------
will impair EDS' right to acquire, license, market, distribute, develop
for itself or others or have others develop for EDS similar technology
performing the same or similar functions as the technology, Services
and Additional Services contemplated by this Agreement.

12.2 Binding Nature and Assignment. This Agreement shall be binding on the
-----------------------------
parties hereto and their respective successors and assigns. Neither
party may, nor shall have the power to, assign this Agreement without
the prior written consent of the other party, which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, EDS will have
the right to subcontract all or any portion of the Services or the
Additional Services; provided, however, that no such subcontract will
relieve EDS of any of its obligations under this Agreement. Any
purported assignment not made in accordance with this Section shall be
null and void.

18
<PAGE> 20

12.3 Notices. Wherever under this Agreement one party is required or
-------
permitted to give written notice to the other, such notice shall be
deemed given the third day after its mailing by one party first class
mail, postage prepaid, to the other party addressed as follows:

In the case of EDS: with a copy to:
Electronic Data Systems Corporation Electronic Data Systems Corporation
800 Tower Drive, 2nd Floor 5400 Legacy Drive
Troy, Michigan 48098 H3-3A-05
Attention: Vice-President, Plano, Texas 75024-3105
Textile and Apparel Division Attention: General Counsel

In the case of Kellwood: with a copy to:
Kellwood Company Kellwood Company
600 Kellwood Parkway 600 Kellwood Parkway
Chesterfield, Missouri 63017 Chesterfield, Missouri 63017
Attention: President Attention: General Counsel

Any writing which may be mailed pursuant to the foregoing may also be
delivered by hand or sent by telecopier and shall be effective when
received by the addressee. Either party may from time to time specify
as its address for purposes of this Agreement any other address upon
giving ten days prior written notice thereof to the other party.

12.4 Counterparts. This Agreement may be executed in several counterparts,
------------
all of which taken together shall constitute one single agreement
between the parties hereto.

12.5 Headings. The Article and Section headings and the table of contents
--------
used in this Agreement are for reference and convenience only and shall
not enter into the interpretation hereof.

12.6 Relationship of Parties. EDS, in furnishing Services and Additional
-----------------------
Services to Kellwood under this Agreement, is acting only as an
independent contractor and under no circumstances will EDS be deemed to
be in any relationship with Kellwood carrying with it fiduciary or
trust responsibilities, whether through partnership or otherwise. EDS
does not undertake by this Agreement or otherwise to perform any
obligation of Kellwood, whether regulatory or contractual, or to assume
any responsibility for Kellwood's business or operations. EDS has the
sole right and obligation to supervise, manage, contract, direct,
procure, perform or cause to be performed, all work to be performed by
EDS under this Agreement unless otherwise provided in this Agreement.

12.7 Force Majeure. Each party shall be excused from performance under
-------------
this Agreement (other than performance of obligations to make payment) for
any period and to the extent that it is prevented from performing
pursuant hereto, in whole or in part, as a result of delays caused by
the other or third parties or an act of God, war, civil disturbance,
court order, labor dispute, or other cause beyond its reasonable
control, including failures or fluctuations in electrical power, heat,
light, air conditioning or telecommunications equipment, and such
nonperformance shall not be a default under this Agreement or a ground
for termination hereof.

12.8 Severability. If any term or provision (other than a term or
------------
provision relating to any payment obligation) of this Agreement or the
application thereof to any person or circumstances shall, to any
extent, be held invalid or unenforceable, the remainder of this
Agreement or the application of such term or provision to persons or
circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the
extent permitted by law.

12.9 Waiver. No delay or omission by either party hereto to exercise any
------
right or power under this Agreement shall impair such right or power or
be construed to be a waiver thereof. A waiver by either of the parties
hereto of any of the covenants to be performed by the other or any
breach thereof shall not be construed to be a waiver of any succeeding
breach thereof or of any other covenant in this Agreement contained. All

19
<PAGE> 21

remedies provided for in this Agreement shall be cumulative and in
addition to and not in lieu of any other remedies available to either
party at law, in equity or otherwise.

12.10 Attorneys' Fees. If any legal action or other proceeding is brought
---------------
for the enforcement of an award under this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees and expenses
and other costs incurred in that action or proceeding, in addition to
any other relief to which it may be entitled.

12.11 Media Releases. All media releases, public announcements and public
--------------
disclosures by Kellwood or EDS relating to this Agreement or its
subject matter, including without limitation promotional or marketing
material (but not including any announcement intended solely for
internal distribution at Kellwood or EDS, as the case may be, or any
disclosure required by legal, accounting or regulatory requirements
beyond the reasonable control of Kellwood or EDS, as the case may be)
shall be coordinated with and approved by Kellwood and EDS prior to the
release thereof.

12.12 No Third-Party Beneficiary. Nothing in this Agreement may be relied
--------------------------
upon or shall benefit any party other than the parties hereto.

12.13 Compliance with Laws. Each party will comply with laws applicable to
--------------------
its business, including governmental regulations, and will obtain any
approvals necessary for performing its obligations under this Agreement.

12.14 Governing Law. This Agreement is made under and shall be governed by
-------------
and construed in accordance with the laws of the State of Texas, without
giving effect to principles of conflict of laws.

12.15 Termination of Previous Agreement. The parties by this reference
---------------------------------
terminate that certain letter dated March 20, 1996 between Kellwood and
EDS and supersede its provisions in every respect by this Agreement.

12.16 Entire Agreement. This Agreement, including any Schedules or Exhibits
----------------
referred to in this Agreement and attached hereto, each of which is
incorporated in this Agreement for all purposes, constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and there are no representations, understandings or agreements
relating to this Agreement which are not fully expressed in this
Agreement. No amendment, modification, waiver or discharge hereof shall
be valid unless in writing and signed by an authorized representative of
the party against which such amendment, modification, waiver or
discharge is sought to be enforced.

IN WITNESS WHEREOF, EDS and Kellwood have each caused this Agreement to
be signed and delivered by its duly authorized representative, all as of the
Effective Date.

KELLWOOD COMPANY ELECTRONIC DATA SYSTEMS
CORPORATION

By: /s/ Hal J. Upbin By: /s/ Donald L. McClure

Name: HAL J.UPBIN Name: DONALD L. MCCLURE

Title: PRESIDENT - C.O.O. Title: VICE PRESIDENT

<PAGE> 1
Kellwood Company and Subsidiaries EXHIBIT 13
FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
- ------------------------------------------------------------------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales............................... $ 1,521,005 $ 1,466,036 $ 1,364,766
=========== =========== ===========

Net Earnings............................ $ 37,596 $ 28,024 $ 11,096
=========== =========== ===========

Per Share Data:
Net Earnings:
Primary............................... $ 1.78 $ 1.32 $ .53
=========== =========== ===========

Fully diluted......................... $ 1.75 $ 1.31 $ .52
=========== =========== ===========

Cash Dividends Declared................. $ .60 $ .60 $ .60
=========== =========== ===========
</TABLE>

<TABLE>
COMMON STOCK DATA
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Fiscal 1997 Fiscal 1996
- ---------------------------------------------------------------------------------------------------
Stock Price Stock Price
--------------- Dividends --------------- Dividends
High Low Paid High Low Paid
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Quarter (July 31)...... $18 1/2 $16 $.15 $20 $16 7/8 $.15
Second Quarter (October 31).. 18 1/4 15 3/4 .15 22 7/8 18 .15
Third Quarter (January 31)... 22 5/8 17 3/4 .15 20 7/8 13 7/8 .15
Fourth Quarter (April 30).... 27 1/8 22 1/4 .15 16 3/4 13 3/4 .15
</TABLE>

Common stock of Kellwood Company is traded on the New York Stock Exchange,
ticker symbol KWD. At June 9, 1997, there were approximately 1,623
shareowners of record and 3,498 shareowners in the Dividend Reinvestment Plan.
The projected annual dividend rate is $.64 after the $.16 regular quarterly
dividend declared in May 1997.

<PAGE> 2

REPORTS OF MANAGEMENT AND INDEPENDENT ACCOUNTANTS

REPORT OF MANAGEMENT
- --------------------

The management of Kellwood Company is responsible for the fair
presentation of the financial statements and other financial information
included in this report. The financial statements have been prepared in
conformity with generally accepted accounting principles applying estimates
and management's best judgments as required to present fairly Kellwood
Company's financial position, results of operations and cash flows.

The accounting systems and internal accounting controls of Kellwood are
designed to provide reasonable assurance that the financial records are
reliable for preparing financial statements and maintaining accountability for
assets and that, in all material respects, assets are safeguarded against loss
from unauthorized use or disposition. Qualified personnel throughout the
organization maintain and monitor these internal accounting controls on an
ongoing basis, and internal auditors systematically review the adequacy and
effectiveness of the controls. Price Waterhouse LLP also studies and evaluates
internal controls for the purpose of establishing a basis for reliance thereon
relative to the scope of their audits of the financial statements. It is
management's opinion that the Company has an effective system of internal
accounting controls.

The Board of Directors, through its Audit Committee consisting solely of
non-management directors, meets periodically with management, the internal
auditors and Price Waterhouse LLP to discuss audit and financial reporting
matters. Both the internal auditors and Price Waterhouse LLP have direct
access to the Audit Committee.

/s/ William J. McKenna

William J. McKenna
Chairman and Chief Executive Officer

/s/ Hal J. Upbin

Hal J. Upbin
President and Chief Operating Officer

/s/ James C. Jacobsen

James C. Jacobsen
Vice Chairman

<PAGE> 3

REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------

TO THE SHAREOWNERS AND BOARD OF DIRECTORS OF KELLWOOD COMPANY:

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of earnings, of cash flows and of shareowners'
equity present fairly, in all material respects, the financial position of
Kellwood Company and its subsidiaries at April 30, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended April 30, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Kellwood's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ Price Waterhouse LLP

St. Louis, Missouri
May 29, 1997

<PAGE> 4

Kellwood Company and Subsidiaries
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
- ----------------------------------------------------------------------------------
1997 1996 1995
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales.............................. $1,521,005 $1,466,036 $1,364,766

Costs and Expenses:
Cost of products sold................ 1,211,548 1,175,139 1,093,508
Selling, general and administrative
expenses............................ 209,371 206,058 196,918
Provision for business and facilities
realignment......................... - - 14,000
Amortization of intangible assets.... 15,373 15,467 15,214
Interest expense..................... 21,566 22,937 19,116
Interest income and other, net....... (1,679) (2,089) (2,486)
---------- ---------- ----------

Earnings Before Income Taxes........... 64,826 48,524 28,496

Income Taxes........................... 27,230 20,500 17,400
---------- ---------- ----------

Net Earnings........................... $ 37,596 $ 28,024 $ 11,096
========== ========== ==========
Earnings Per Share:

Primary.............................. $ 1.78 $ 1.32 $ .53
========== ========== ==========

Fully diluted........................ $ 1.75 $ 1.31 $ .52
========== ========== ==========
See notes to consolidated financial statements.
</TABLE>

<PAGE> 5

Kellwood Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
- --------------------------------------------------------------------------------
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS

Current Assets:
Cash, including time deposits of $18,039
($15,457 in 1996)..................................... $ 22,513 $ 25,043
Receivables, net...................................... 271,629 235,108
Inventories........................................... 298,938 264,583
Prepaid taxes and expenses............................ 28,444 19,624
--------- ---------

Total Current Assets.............................. 621,524 544,358

Property, Plant and Equipment........................... 177,754 170,344
Less accumulated depreciation and amortization....... (114,954) (106,536)
--------- ---------

62,800 63,808

Intangible Assets, net................................. 113,873 120,401
Other Assets........................................... 76,390 68,121
--------- ---------

$ 874,587 $ 796,688
========= =========

LIABILITIES AND SHAREOWNERS' EQUITY

Current Liabilities:
Current portion of long-term debt.................... $ 15,409 $ 18,198
Notes payable........................................ 159,129 128,765
Accounts payable..................................... 122,049 98,148
Accrued expenses..................................... 77,823 61,179
--------- ---------

Total Current Liabilities........................ 374,410 306,290

Long-Term Debt......................................... 109,831 125,443
Deferred Income Taxes and Other........................ 42,532 39,763

Shareowners' Equity:
Common stock, par value $.01 per share, authorized
50,000,000 shares; issued and outstanding
21,121,487 shares (21,228,599 in 1996).............. 99,077 94,562
Retained earnings.................................... 293,986 269,060
Cumulative translation adjustment.................... (8,280) (8,800)
--------- ---------

384,783 354,822
Less treasury stock, at cost......................... (36,969) (29,630)
--------- ---------

347,814 325,192
--------- ---------

$ 874,587 $ 796,688
========= =========

See notes to consolidated financial statements.
</TABLE>

<PAGE> 6

Kellwood Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,

- ---------------------------------------------------------------------------------------
1997 1996 1995

- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings.......................................... $ 37,596 $ 28,024 $ 11,096
Add (deduct) items not affecting operating
cash flows:
Depreciation and amortization...................... 28,277 28,183 28,291
Provision for business and facilities realignment.. - - 14,000
Increase in prepaid pension costs.................. (8,100) (7,597) (7,396)
Deferred income taxes.............................. (7,471) 794 1,326
Other.............................................. 882 864 (709)
-------- -------- --------

51,184 50,268 46,608

Changes in noncash working capital components,
net of effects of acquisitions:
Receivables........................................... (33,685) 4,937 (27,014)
Inventories........................................... (32,061) (25,122) (21,880)
Prepaid expenses...................................... 465 362 (1,446)
Accounts payable and accrued expenses................. 37,898 17,517 (13,700)
-------- -------- --------

Net cash provided by (used for)
operating activities............................ 23,801 47,962 (17,432)
-------- -------- --------

INVESTING ACTIVITIES:
Additions to property, plant and equipment............ (11,644) (16,411) (11,658)
Proceeds from disposal of assets...................... - 2,750 4,724
Investment in subsidiaries............................ (11,849) (4,935) (55,218)
Other investing activities............................ 693 615 1,342
-------- -------- --------

Net cash (used for) investing activities......... (22,800) (17,981) (60,810)
-------- -------- --------

FINANCING ACTIVITIES:
Proceeds from notes payable, net...................... 30,364 4,498 90,439
Proceeds from issuance of long-term debt.............. - - 395
Reduction of long-term debt........................... (18,216) (9,428) (9,256)
Stock transactions under incentive plans.............. 2,771 1,610 2,730
Purchase of treasury stock............................ (5,780) - -
Dividends paid........................................ (12,670) (12,700) (12,650)
-------- -------- --------

Net cash (used for) provided by financing
activities...................................... (3,531) (16,020) 71,658
-------- -------- --------

Net increase (decrease) in cash and time deposits........ (2,530) 13,961 (6,584)
Cash and time deposits - beginning of year............... 25,043 11,082 17,666
-------- -------- --------

Cash and time deposits - end of year..................... $ 22,513 $ 25,043 $ 11,082
======== ======== ========

See notes to consolidated financial statements.
</TABLE>

<PAGE> 7

Kellwood Company and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common Stock Treasury Cumulative
------------ Stock Retained Translation
Shares Amount Amount Earnings Adjustment
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, May 1, 1994................. 20,960,675 $90,657 $(30,065) $255,290 $(8,926)
Net earnings................ 11,096
Cash dividends declared,
$.60 per share............. (12,650)
Shares issued under stock
plans...................... 153,177 2,504 455
Treasury stock acquired in
conjunction with incentive
plans...................... (23,077) (468)
Debentures converted........ 38,044 239
Currency translation
adjustment................. 65
---------- ------- -------- -------- -------

Balance, April 30, 1995.............. 21,128,819 93,400 (30,078) 253,736 (8,861)
Net earnings................ 28,024
Cash dividends declared,
$.60 per share............. (12,700)
Shares issued under stock
plans...................... 112,782 1,127 752
Treasury stock acquired in
conjunction with incentive
plans...................... (17,894) (304)
Debentures converted........ 4,892 35
Currency translation
adjustment................. 61
---------- ------- -------- -------- -------

Balance, April 30, 1996.............. 21,228,599 94,562 (29,630) 269,060 (8,800)
Net earnings................ 37,596
Cash dividends declared,
$.60 per share............. (12,670)
Shares issued under stock
plans...................... 268,494 4,330 495
Treasury stock acquired in
conjunction with incentive
plans...................... (80,514) (2,068)
Treasury stock acquired
under repurchase program (324,300) (5,766)
Debentures converted........ 29,208 185
Currency translation
adjustment................. 520
---------- ------- -------- -------- -------

Balance, April 30, 1997.............. 21,121,487 $99,077 $(36,969) $293,986 $(8,280)
========== ======= ======== ======== =======

See notes to consolidated financial statements.
</TABLE>

<PAGE> 8

Kellwood Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

1. PRINCIPLES OF CONSOLIDATION:

The consolidated financial statements include the accounts of the
Company and all majority-owned subsidiaries. Substantially all foreign
subsidiaries are consolidated based upon a fiscal year ending March 31. All
significant intercompany accounts and transactions have been eliminated.

2. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates and
assumptions.

3. INVENTORIES AND REVENUE RECOGNITION:

Inventories are stated at the lower of cost or market. The first-in,
first-out (FIFO) method is used to determine the value of 44% of the domestic
inventories, and the last-in, first-out (LIFO) method is used to value the
remaining domestic inventories. Inventories of foreign subsidiaries are
valued using the specific identification method. Sales are recognized when
goods are shipped.

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. A significant
portion of domestic manufacturing facilities and some machinery and equipment
are leased under long-term capital leases which are recorded at the beginning
of the lease term at the present value of the minimum lease payments.

Depreciation is computed generally on the declining balance method over
estimated useful lives of 15 to 40 years for buildings and of 3 to 10 years
for machinery and equipment. Leasehold improvements are amortized principally
on the straight-line basis over the shorter of their estimated useful lives or
the remaining lease term.

5. INTANGIBLE ASSETS:

The excess costs over net tangible assets of businesses acquired are
recorded as intangible assets. These intangibles are amortized using the
straight-line method over their estimated useful lives which range from 1 to
20 years.

6. IMPAIRMENT OF ASSETS:

The Company reviews long-lived assets, goodwill and other intangibles
to assess recoverability from future operations using expected undiscounted
future cash flows whenever events and circumstances indicate that the carrying
values may not be recoverable. Impairment losses are recognized in operating
results when expected undiscounted future cash flows are less than the
carrying value of the asset.

<PAGE> 9

7. INCOME TAXES:

Income taxes are based upon income for financial reporting purposes.
Deferred income taxes are recognized for the effect of temporary differences
between financial and tax reporting in accordance with the requirements of
Statement of Financial Accounting Standards No. 109.

8. FOREIGN CURRENCY TRANSLATION:

Foreign currency financial statements are translated into United States
dollars using period-end rates of exchange for assets and liabilities and
monthly average rates of exchange for income and expenses. Adjustments
resulting from translation are accumulated in the Cumulative Translation
Adjustment component of Shareowners' Equity. Gains or losses from foreign
currency transactions are included in income in the period in which they
occur. The net foreign currency gains and losses recognized in 1997, 1996 and
1995 were not significant.

9. EARNINGS PER SHARE:

Primary earnings per share are computed by dividing net earnings by the
weighted average number of shares of common stock outstanding of 21,130,829
for the year ended April 30, 1997 (21,170,220 for 1996 and 21,079,698 for
1995). Common stock equivalents are excluded from the primary earnings per
share computation because their dilutive effect is not significant. During
1997, 29,208 shares of common stock were issued upon conversion of 9%
convertible subordinated debentures. Had the conversions taken place on
May 1, 1996, primary earnings per share for 1997 would not have been
significantly different.

The calculation of fully diluted earnings per share includes common
stock equivalents in addition to the weighted average shares outstanding as
defined above and assumes that all convertible debentures were converted to
common stock at the beginning of the year. The average number of shares used
in the fully diluted computation was 21,532,648 in 1997 (21,380,273 in 1996
and 21,366,121 in 1995). Net earnings are increased by the after tax interest
on the convertible debentures in the computation of fully diluted earnings per
share.

10. STOCK-BASED COMPENSATION:

Kellwood Company uses the intrinsic value method for measuring
stock-based compensation cost. Under this method, compensation cost is the
excess, if any, of the quoted market price of Kellwood's common stock at the
grant date over the amount the employee must pay for the stock. Kellwood's
policy is to grant stock options at fair market value at the date of grant.

ACQUISITIONS:

All of the capital stock of Halmode Apparel, Inc., which designs and
markets branded apparel, was purchased for cash on September 30, 1994. The
acquisition has been accounted for using the purchase method and, accordingly,
the results of operations are included in the Consolidated Statement of
Earnings from the date of acquisition. Assets acquired and liabilities
assumed were recorded at their estimated fair market value, and the excess
costs over net tangible assets are being amortized over the estimated useful
lives of the related intangible assets. Had the purchase taken place May 1,
1994, unaudited pro forma consolidated net sales would have been $1,426,278
for the year ended April 30, 1995. Consolidated net earnings and earnings per
share would not have been significantly different.

<PAGE> 10

ALLOWANCE FOR DOUBTFUL ACCOUNTS:

The allowance for doubtful accounts at April 30, 1997, was $5,536
($5,225 at April 30, 1996).

INVENTORIES:

Inventory valued under the LIFO method totaled $144,801 at April 30,
1997 ($122,549 at April 30, 1996). The remainder of the inventory was valued
using the FIFO and specific identification methods. If LIFO inventories had
been valued at current replacement costs, they would have totaled $153,564 at
April 30, 1997 ($132,688 at April 30, 1996).

<TABLE>
<CAPTION>
April 30,
-------------------
1997 1996
-------------------
<S> <C> <C>
Finished goods................................... $127,630 $110,207
Work in process.................................. 98,607 91,682
Raw materials.................................... 72,701 62,694
-------- --------

$298,938 $264,583
======== ========
<CAPTION>
PROPERTY, PLANT AND EQUIPMENT:

April 30,
---------------------
1997 1996
---------------------
<S> <C> <C>
Land.............................................. $ 3,520 $ 3,511
Buildings and improvements........................ 80,005 79,598
Machinery and equipment........................... 94,229 87,235
--------- ---------

177,754 170,344

Less accumulated depreciation
and amortization................................. (114,954) (106,536)
--------- ---------

$ 62,800 $ 63,808
========= =========
</TABLE>

The amounts above include the cost and accumulated amortization of
assets under capital leases (primarily buildings) of $12,512 and $11,700,
respectively, at April 30, 1997, and $12,512 and $11,348, respectively, at
April 30, 1996.

Certain machinery and equipment are leased under operating leases having
remaining terms ranging up to 6 years. Rent expense under all operating
leases for the year ended April 30, 1997 totaled $16,035 ($15,969 for 1996 and
$14,327 for 1995).

<PAGE> 11

The future minimum lease payments under capital and operating leases at
April 30, 1997, were as follows:

<TABLE>
<CAPTION>
------------------
Capital Operating
------------------
<S> <C> <C>
1998............................................... $ 538 $ 13,814
1999............................................... 431 9,665
2000............................................... 370 6,783
2001............................................... 585 4,605
2002............................................... 296 3,664
Later years........................................ 634 4,262
------- ---------

Total minimum lease payments....................... 2,854 $ 42,793
=========

Less amount representing interest.................. (605)
-------

Present value of net minimum lease payments........ $ 2,249
=======
</TABLE>

Minimum lease payments were not reduced for future minimum sublease
rentals of $1,496.

<TABLE>
INTANGIBLE ASSETS:
<CAPTION>
April 30,
-------------------
1997 1996
-------------------
<S> <C> <C>
Goodwill.......................................... $109,491 $100,765
Other identifiable intangibles.................... 81,446 90,840
-------- --------
190,937 191,605
Less accumulated amortization..................... (77,064) (71,204)
-------- --------

$113,873 $120,401
======== ========
</TABLE>

Other identifiable intangible assets consist primarily of trademarks, customer
lists, contractor networks and agreements not to compete.

NOTES PAYABLE AND LONG-TERM DEBT:

1. NOTES PAYABLE:

The Company entered into a credit facility agreement on May 31, 1996, in
the amount of $300,000, which expires October 30, 1999. Under the agreement,
up to $200,000 can be utilized for short-term loans and up to $200,000 can be
utilized for letters of credit provided that the combined utilization does not
exceed $300,000. Each borrowing under the agreement bears interest at one of
several specified rates dependent upon several factors including the Company's
leverage ratio, senior debt rating and the applicable Eurodollar margin. At
April 30, 1997, outstanding short-term loans and letters of credit under the
agreement were $0 and $130,187, respectively. Covenants are less restrictive
than those currently existing for Kellwood's notes due insurance companies.
During the year ended April 30, 1997, the highest level of borrowings
under all lines was $220,821 ($191,446 for 1996). For the year, the average
daily short-term borrowings were $159,221 ($153,100 for 1996) and the weighted
average interest rate was 5.8% (6.2% for 1996).

<PAGE> 12

2. LONG-TERM DEBT:

<TABLE>
<CAPTION>
April 30,
-------------------
1997 1996
-------------------
<S> <C> <C>
Notes due insurance companies, 6.90% - 10.77%..... $122,355 $140,165
Capital lease obligations, 4.9% - 10.2%........... 2,249 2,655
9% convertible subordinated debentures............ 636 821
-------- --------

125,240 143,641
Less current maturities........................... (15,409) (18,198)
-------- --------

$109,831 $125,443
======== ========
</TABLE>

Aggregate maturities on long-term debt for the next five years are as
follows: 1998 - $15,409; 1999 - $15,329; 2000 - $15,927; 2001 - $10,533; 2002
- - $15,272.

Notes payable to insurance companies are due in quarterly and semiannual
installments from June 1997 through September 2005. Restrictive covenants of
these notes include the maintenance of minimum working capital and certain key
ratios as well as a limitation on the payment of dividends and the repurchase
of Company stock. Under the most restrictive covenants, future dividends and
purchases of Company stock are limited to $56,676 plus 45% of net earnings
after April 30, 1997, excluding gains and losses on the disposal of capital
assets.

The 9% convertible subordinated debentures may be converted into common
stock by debenture holders at a rate of $6.33 per share at any time prior to
maturity on October 15, 1999, subject to certain restrictions. Also, subject
to certain restrictions, the debentures are redeemable, in whole or in part,
at the option of the Company at predetermined redemption prices.

ACCRUED EXPENSES:

<TABLE>
<CAPTION>
April 30,
-------------------
1997 1996
-------------------
<S> <C> <C>
Salaries and employee benefits.............. $32,284 $28,924
Income taxes................................ 13,814 323
Other accrued expenses...................... 31,725 31,932
------- -------

$77,823 $61,179
======= =======
</TABLE>

<PAGE> 13

EMPLOYEE BENEFIT PLANS:

1. RETIREMENT PLANS AND POST RETIREMENT BENEFITS:

Various contributory and noncontributory retirement plans cover
substantially all domestic and certain foreign employees. Benefits under
pension plans are generally based on years of service and compensation.
Pension plans are funded in accordance with the applicable laws and
regulations plus such amounts, if any, as the actuarial consultants advise to
be appropriate. Company contributions under the contributory retirement plan
are determined based on formulas defined in the plan.

The total credit under all retirement plans was $(3,318), $(3,626), and
$(3,593) in 1997, 1996, and 1995, respectively. The total credits reflect
$(7,901), $(7,240), and $(7,109) for defined benefit plans.

The net credit for defined benefit plans included the following
components:

<TABLE>
<CAPTION>
Year ended April 30,
---------------------------
1997 1996 1995
---------------------------
<S> <C> <C> <C>
Current service cost.............................. $ 1,867 $ 1,790 $ 1,715
Interest cost on projected benefit
obligation....................................... 4,244 4,052 3,989
Return on assets:
Actual return.................................. (9,923) (23,968) (8,386)
Deferred actuarial gain (loss)................. (18) 14,957 (355)
------- -------- -------
Assumed return............................... (9,941) (9,011) (8,741)
Amortization of transition asset and
prior service costs.............................. (4,071) (4,071) (4,072)
------- -------- -------

Net pension credit........................ $(7,901) $ (7,240) $(7,109)
======= ======== =======
</TABLE>

The funded status of the defined benefit plans was as follows:

<TABLE>
<CAPTION>
--------------------------
1997 1996
--------------------------
<S> <C> <C>
Plan assets at fair value........................... $142,522 $137,540
-------- --------
Actuarial present value of benefit obligation:
Vested benefits................................... 46,256 45,809
Non vested benefits............................... 3,179 3,285
-------- --------
Accumulated benefit obligation.................... 49,435 49,094
Impact of future salary increases................. 4,915 4,689
-------- --------
Projected benefit obligation......................... 54,350 53,783
-------- --------
Plan assets in excess of projected benefit obligation 88,172 83,757
Unamortized transition asset......................... (3,496) (7,424)
Unamortized prior service costs...................... (321) (465)
Unrecognized actuarial gains......................... (14,195) (13,809)
-------- --------

Prepaid pension costs included in other assets. $ 70,160 $ 62,059
======== ========
</TABLE>

The discount rate used in determining the projected benefit obligation
was 8.0% for 1997, 8.0% for 1996 and 8.25% for 1995. The rate of increase in
future compensation levels was 5.0% for 1997, 5.0% for 1996 and 5.5% for
1995. The assumed long-term rate of return on plan assets was 8.0% in each
year. The assets of the retirement plans consist primarily of marketable

<PAGE> 14

equity securities, U.S. Government obligations, corporate debt obligations and
short-term marketable debt securities.

The Company provides health care insurance benefits to certain employees
upon retirement. The annual costs of these benefits in 1997, 1996 and 1995
were not significant.

2. INCENTIVE COMPENSATION PLANS:

The amended Restricted Stock Compensation Plan of 1969 and the Corporate
Development Incentive Plan of 1986 provide for the granting of common stock to
key employees as performance and incentive bonuses. The shares granted may
not be transferred, sold, pledged or otherwise disposed of prior to the lapse
of certain restrictions. Under the plans, $1,999 was charged to earnings in
1997 ($112 in 1996, and zero in 1995). At April 30, 1997, 387,800 shares were
available to be granted under these plans to qualified employees.

Options to purchase common stock have been granted to key employees
under various plans at option prices not less than the fair market value on
the date of the grant. At April 30, 1997, 131 officers and other key
employees held options to purchase shares. The options expire 10 years after
grant on dates ranging from May 1997 to August 2006 and are exercisable in
cumulative installments only after stated intervals of time and are
conditional upon active employment, except for periods following disability or
retirement.

The Company uses the intrinsic value method in accounting for its stock
option plans. Had compensation cost for the Company's stock options been
recognized based upon the fair value on the grant date under the methodology
prescribed by SFAS 123, "Accounting for Stock-based Compensation," the
Company's net earnings and earnings per share for the years ended April 30,
1997 and 1996 would have been impacted as indicated in the following table (in
millions, except per share):

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year ended April 30, 1997 1996
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Reported net earnings $37,596 $28,024
Pro forma net earnings $37,078 $27,732
Reported fully diluted earnings per share $ 1.75 $ 1.31
Pro forma fully diluted earnings per share $ 1.73 $ 1.30
- ---------------------------------------------------------------------------------------
</TABLE>

The fair value of options granted (which is recorded as expense over the
option vesting period in determining the pro forma impact), is estimated on
the date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Year ended April 30, 1997 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Expected life option 5 years 5 years
Risk-free interest rate 6.27% to 6.36% 6.05% to 6.17%
Expected volatility of Kellwood stock 35% 35%
Expected dividend yield on Kellwood stock 3.69% 2.89%
- ------------------------------------------------------------------------------------------
</TABLE>

The weighted-average grant date fair value of options granted was $4.77
to $4.83 for 1997 and $6.45 to $6.63 for 1996.

<PAGE> 15

The pro forma effect on net earnings for 1997 and 1996 is not
representative of the pro forma effect on net earnings in future years because
it does not take into consideration pro forma compensation related to grants
made prior to 1996.
Presented below is a summary of stock option plans' activity for the
years shown:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Wtd. Avg.
Options Exercise Price
------- --------------
<S> <C> <C>
Balance, May 1, 1994 903,928 $16.21
Granted 394,900 $20.20
Exercised (32,680) $11.43
Canceled (3,510) $19.42
---------

Balance, April 30, 1995 1,262,638 $17.58
Granted 380,500 $20.32
Exercised (25,800) $12.93
Canceled (225) $10.75
---------

Balance, April 30, 1996 1,617,113 $18.30
Granted 408,000 $16.14
Exercised (210,573) $14.33
Canceled (88,415) $19.06
---------
Balance, April 30, 1997 1,726,125 $18.23
=========
</TABLE>

The following summarizes for options outstanding and exercisable at April 30,
1997:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Options Outstanding
- -------------------------------------------------------------------------
Range of Wtd. Avg. Wtd. Avg.
Prices Number Remaining Life Exercise Price
-------- ------ -------------- --------------
<S> <C> <C> <C>
$ 6.04- 9.92 46,115 3 yrs. $ 7.45
$12.29-13.79 101,630 4 yrs. $12.49
$16.13-19.96 960,210 7 yrs. $17.98
$20.31-24.88 618,170 8 yrs. $20.37
-------

$ 6.04-24.88 1,726,125 7 yrs. $18.23
=========
<CAPTION>
- -------------------------------------------------------------------------
Options Exercisable
- -------------------------------------------------------------------------
Range of Wtd. Avg. Wtd. Avg.
Prices Number Remaining Life Exercise Price
-------- ------ -------------- --------------
<S> <C> <C> <C>
$ 6.04- 9.92 46,115 3 yrs. $ 7.45
$12.29-13.79 101,630 4 yrs. $12.49
$16.13-19.96 349,255 6 yrs. $19.14
$20.31-24.88 181,780 8 yrs. $20.51
-------

$ 6.04-24.88 678,780 6 yrs. $17.72
=======
- -------------------------------------------------------------------------
</TABLE>

<PAGE> 16

CAPITAL STOCK:

The reported outstanding shares of common stock have been reduced by
treasury stock totaling 3,499,326 shares at April 30, 1997 (3,145,398 at
April 30, 1996, and 3,207,385 at April 30, 1995). On September 30, 1996,
Kellwood Company adopted a common stock repurchase program. The Company is
authorized to repurchase up to 10% of the approximately 21,000,000 shares of
its common stock outstanding at that date. As of April 30, 1997,
approximately 324,000 shares have been repurchased under this program.

Authorized capital includes 500,000 shares of preferred stock, none of
which have been issued. Nonvoting share purchase rights, exercisable only
upon satisfaction of certain conditions, entitle the holder to purchase Series
A Junior Preferred Stock (160,000 shares reserved) or, under certain
conditions, common shares at prices specified in the rights agreement. None
of the rights were exercisable as of April 30, 1997.

PROVISION FOR BUSINESS AND FACILITIES REALIGNMENT:

In the fourth quarter of fiscal 1995, Kellwood Company recorded a $14,000
provision for business and facilities realignment related to the shut-down of
its Saipan facility which was substantially complete by April 30, 1996.
Actual costs incurred remained in line with the established provision.
Unaudited net sales from the Saipan operations were $6,600 and $17,800 for the
years ended April 30, 1996 and 1995, respectively. Unaudited net operating
losses from Saipan operations were $2,300 and $11,600 for the years ended
April 30, 1996 and 1995, respectively.

INTEREST INCOME AND OTHER, NET:
<TABLE>
<CAPTION>
Year ended April 30,
---------------------------
1997 1996 1995
---------------------------
<S> <C> <C> <C>
Interest income........................... $1,066 $ 412 $ 437
Other, net................................ 613 1,677 2,049
------ ------ ------

$1,679 $2,089 $2,486
====== ====== ======
</TABLE>

<PAGE> 17

INCOME TAXES:

The provision for income taxes consisted of:

<TABLE>
<CAPTION>
Year ended April 30,
------------------------------
1997 1996 1995
------------------------------
<S> <C> <C> <C>
Current:
Domestic:
Federal.............................. $28,144 $15,521 $15,314
State................................ 4,543 3,000 3,000
Foreign................................ 2,015 795 (712)
------- ------- -------

34,702 19,316 17,602

Deferred (primarily federal).............. (7,472) 1,184 (202)
------- ------- -------

$27,230 $20,500 $17,400
======= ======= =======
</TABLE>

Current income taxes are the amounts payable under the respective tax
regulations on each year's earnings and on foreign earnings remitted during
the year. Deferred income taxes included the following:

<TABLE>
<CAPTION>
Year ended April 30,
------------------------------
1997 1996 1995
------------------------------
<S> <C> <C> <C>
Employee related costs.................... $ 2,330 $ 2,635 $ 3,280
Depreciation and amortization............. (1,180) (2,022) (1,580)
Allowance for asset valuations............ (9,130) 437 (2,356)
Other..................................... 508 134 454
$(7,472) $ 1,184 $ (202)
======= ======= =======
</TABLE>

A reconciliation of the federal statutory income tax rate to the
effective tax rate (provision for taxes) was as follows:

<TABLE>
<CAPTION>
Year ended April 30,
-----------------------------
1997 1996 1995
-----------------------------
<S> <C> <C> <C>
Statutory rate................................ 35.0% 35.0% 35.0%
Foreign tax differences....................... 1.4 (.8) (.9)
Amortization of intangible assets............. 4.3 5.7 9.2
Deductible acquisition costs.................. - - (5.2)
Provision for business and facilities
realignment................................ - - 17.2
State tax..................................... 3.5 4.0 6.8
Other......................................... (2.2) (1.7) (1.0)
---- ---- ----
42.0% 42.2% 61.1%
==== ==== ====
</TABLE>

<PAGE> 18

Deferred income tax liabilities and assets consisted of the following:

<TABLE>
<CAPTION>
Year ended April 30,
--------------------------------
1997 1996 1995
--------------------------------
<S> <C> <C> <C>
Employee related costs.................... $ 20,494 $ 17,871 $ 15,303
Depreciation and amortization............. 13,292 14,765 17,329
Allowance for asset valuations............ (17,221) (8,091) (8,454)
Other..................................... (1,111) (1,620) (2,047)
-------- -------- --------
$ 15,454 $ 22,925 $ 22,131
======== ======== ========

Included in:
Prepaid taxes and expenses............. $(24,437) $(15,166) $(15,867)
Deferred income taxes and other...... 39,891 38,091 37,998
-------- -------- --------
$ 15,454 $ 22,925 $ 22,131
======== ======== ========
</TABLE>

Earnings before income taxes included $6,465 of Far East earnings in 1997.
Earnings before income taxes included $802 of Far East losses in 1996 and
$3,579 of Far East losses and a $14,000 provision for business and facilities
realignment in 1995.

Federal income taxes are provided on earnings of foreign subsidiaries
except to the extent that such earnings are expected to be indefinitely
reinvested abroad. Undistributed foreign earnings considered to be
indefinitely reinvested abroad totaled $64,866 through April 30, 1997.

CASH FLOWS:

For purposes of the Consolidated Statement of Cash Flows, all highly liquid
short-term time deposits maintained under cash management activities are
considered cash equivalents. The effect of foreign currency exchange rate
fluctuations on cash and time deposits was not significant for the years ended
April 30, 1997, 1996 and 1995.

Interest paid in 1997 was $22,108 ($22,853 in 1996 and $18,213 in 1995) and
income taxes paid were $22,443 ($22,386 in 1996 and $31,532 in 1995).
Liabilities assumed in connection with the Investment in Subsidiaries totaled
$321 in 1997.

SIGNIFICANT CUSTOMERS:

Sales to J.C. Penney Company, Inc., totaled $157,148 for the year ended
April 30, 1997 ($142,857 for 1996 and $134,523 for 1995). Receivables
included $37,065 due from J.C. Penney at April 30, 1997 ($17,095 at April 30,
1996).

COMMITMENTS AND CONTINGENCIES:

There are various lawsuits and other legal proceedings against the Company.
Management and general counsel are of the opinion that the ultimate
disposition of such litigation will have no material adverse effect on the
Company's financial position or results of operations.

<PAGE> 19

SELECTED QUARTERLY DATA (UNAUDITED):

<TABLE>
<CAPTION>
----------------------------------------
First Second Third Fourth
----------------------------------------
<S> <C> <C> <C> <C>
Fiscal 1997:
Net sales.................... $327,435 $429,435 $315,791 $448,344
Gross profit................. 65,531 87,684 61,692 94,550
Net earnings................. 5,818 14,438 2,025 15,315
Earnings per share:
Primary................... .27 .68 .10 .73
Fully diluted............. .27 .67 .09 .72

Fiscal 1996:
Net sales.................... $340,625 $425,635 $288,490 $411,286
Gross profit................. 69,417 88,453 52,650 80,377
Net earnings (loss).......... 5,644 14,019 (2,044) 10,405
Earnings (loss) per share:
Primary................... .27 .66 (.10) .49
Fully diluted............. .26 .65 (.09) .49
</TABLE>

<PAGE> 20

INDUSTRY SEGMENT AND GEOGRAPHIC AREA INFORMATION:

All operations are in the apparel and related soft goods industry. A
summary of operations by geographic area is presented in the column to the
right. Substantially all Domestic and Far East sales are to U.S. customers.
Sales and transfers between geographic areas were not significant and
intercompany accounts have been eliminated.

<TABLE>
<CAPTION>
Year ended April 30,
----------------------------------------
1997 1996 1995
----------------------------------------
<S> <C> <C> <C>
Net sales to customers:
Domestic.......................... $1,367,810 $1,316,656 $1,211,151
Far East.......................... 153,195 149,380 153,615
---------- ---------- ----------

$1,521,005 $1,466,036 $1,364,766
========== ========== ==========

Operating profit (loss):
Domestic.......................... $ 104,015 $ 91,271 $ 85,554
Far East.......................... 9,286 654 (2,879)
---------- ---------- ----------

113,301 91,925 82,675
Provision for business and
facilities realignment............. - - (14,000)
Interest expense.................... (21,566) (22,937) (19,116)
General corporate expense and other. (26,909) (20,464) (21,063)
---------- ---------- ----------

Earnings before income taxes........ $ 64,826 $ 48,524 $ 28,496
========== ========== ==========

Assets at end of year:
Domestic.......................... $ 684,504 $ 627,253 $ 606,638
Far East.......................... 93,210 89,225 89,394
Corporate......................... 96,873 80,210 72,105
---------- ---------- ----------

$ 874,587 $ 796,688 $ 768,137
========== ========== ==========

Capital expenditures:
Domestic.......................... $ 7,364 $ 13,477 $ 7,486
Far East.......................... 4,051 2,296 3,827
Corporate......................... 229 638 345
---------- ---------- ----------

$ 11,644 $ 16,411 $ 11,658
========== ========== ==========

Depreciation and amortization:
Domestic.......................... $ 23,767 $ 23,085 $ 22,600
Far East.......................... 2,639 3,590 4,579
Corporate......................... 1,871 1,508 1,112
---------- ---------- ----------

$ 28,277 $ 28,183 $ 28,291
========== ========== ==========
</TABLE>

<PAGE> 21

Kellwood Company and Subsidiaries
SUPPLEMENTAL SELECTED FINANCIAL DATA
(Dollars in thousands except per share data)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales.......... $1,521,005 $1,466,036 $1,364,766 $1,203,086 $1,077,655

Net earnings....... 37,596 28,024 11,096 35,614 28,694
Earnings per
share:
Primary.......... 1.78 1.32 .53 1.71 1.39
Fully diluted.... 1.75 1.31 .52 1.68 1.36
Cash dividends
declared per
share............. .60 .60 .60 .55 .53
Working capital.... 247,114 238,068 236,922 262,406 197,518
Total assets....... 874,587 796,688 768,137 641,857 636,455
Long-term debt..... 109,831 125,443 144,793 153,014 102,923
Total debt......... 284,369 272,406 277,336 170,940 203,808
Shareowners'
equity............ 347,814 325,192 308,197 306,956 279,860
Equity per
share............. 16.47 15.32 14.59 14.64 13.51

NOTE: All per share data have been adjusted to reflect stock splits.
</TABLE>

SUPPLEMENTAL DATA:

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (UNAUDITED)

Domestic operations include marketing-oriented branded businesses
offering apparel and camping soft goods, and manufacturing-oriented private
label units offering apparel products. Domestic operations produce goods in
the United States, the Caribbean, and Canada. Far East operations produce
high quality, competitively priced, private label cotton and cotton-blended
shirts and blouses in Hong Kong, China and Sri Lanka. In addition to the
Company's owned and leased plants, products are sourced through contracting
relationships with other manufacturers in various countries. The Company
sells its products through multiple channels of distribution, including
national retail chains, department stores, specialty stores, mass merchants,
mail order houses, sporting goods stores and other manufacturers.

RESULTS OF OPERATIONS

FISCAL 1997

Sales by Domestic branded operations increased by $35 million or 3% for
the year. The increase in branded sales was principally attributable to
growth in popular-to-moderately priced women's apparel as Kellwood continued
to gain market share in this segment with the leading retailers. In addition,
the Company's new and expanding marketing initiatives contributed to increased
Domestic branded sales. Sales from the branded portfolio accounted for 73% of
Kellwood's total volume for the year ended April 30, 1997, which is consistent
with the prior year. The Domestic branded operations have continued to
contribute significantly to total company earnings and operating margins have
shown improvement as a result of more efficient overhead spending.

<PAGE> 22

Sales by Domestic private label operations increased by $16 million or
7% for the year. Sales and operating profits for the Domestic private label
portfolio have increased during the year as a result of several successful
private label programs with key retailers and gains in efficiencies at private
label facilities.

Sales by Far East operations increased by $4 million or 3% for the year.
Far East operations have continued to gain market share in the better dress
shirt and sport shirt categories while improving customer mix. Operating
profits have also shown continued improvement as a result of the sale of the
Saipan plant in fiscal 1996 and continued movement of Far East resources and
operations to improve efficiencies.

The Company achieved a 34% increase in net earnings on a 4% increase in
sales for the year primarily due to increased operating efficiencies and
several marketing initiatives. The decrease in interest expense correlates
with a decrease in average outstanding debt for the year.

FISCAL 1996

In a difficult retail apparel climate, Kellwood was able to grow its
business by $101 million, or 7%, to $1.466 billion. Womenswear represents 82%
of Kellwood's total apparel volume and grew at 11% in fiscal year 1996. Of
greater significance was a 16% growth in sales to the Company's top 20
accounts. These accounts represent the retailers who dominate their
respective channels of distribution, and who are gaining market share as the
retail industry continues to consolidate. Kellwood's top 20 customers
represent 63% of sales.

Sales by Domestic branded operations increased 12% for the year. The
increase in branded sales is principally attributable to the acquisitions of
Halmode Apparel and David Dart. Sales from the branded portfolio accounted
for 73% of Kellwood's total volume for the year ended April 30, 1996. This
compares to 70% last year and moves the Company closer to achieving its goal
of 75% from the branded sector. The Domestic branded operations, with their
overall higher margins, contributed significantly to total company earnings.

Sales by Domestic private label operations declined 3% for the year.
Adjusting last year's volume for the Home Fashions division which was sold in
December, 1994, Domestic private label sales were up 4%. Operating profits in
the Domestic private label portfolio were improved as a result of several
successful private label programs with key customers as well as from the
divestiture of the Home Fashions division.

Sales by Far East operations were down 3% for the year due primarily to
the shut down of the Saipan and Costa Rica facilities. Despite the decline in
volume, operating profits improved as production shifted from the closed plant
in Saipan to more efficient plants in Hong Kong/China and Sri Lanka. In
October, the Company received $2.7 million in proceeds from the sale of assets
in Saipan. The costs of the divestiture have remained in line with the
provision established in the fourth quarter last year.

After adjusting fiscal 1995 for the $14 million shutdown provision, the
Company achieved a 12% increase in consolidated net earnings on a 7% increase
in sales for the year because of changes in sourcing, leveraging overhead
spending and efficient operation of the private label facilities. The
increase in interest expense correlates with the increase in average
outstanding debt.

<PAGE> 23

FISCAL 1995

Sales by Domestic branded operations were up $157 million or 20%. The
increase in branded sales was principally attributable to the recent
acquisitions of Halmode and David Dart. Within the branded group, operating
results were mixed causing an overall decline in margins. In response to this
decline two relatively small under performing divisions (California Ivy and
de'corp) were consolidated with larger units to create synergies as well as
generate future savings in overhead. In addition, the Company repositioned
two other branded units (AJ Brandon and Melrose) to strengthen their
merchandising, sourcing, management and overall direction.

Sales by Domestic private label operations increased 4% or $10 million
over the prior year. Apparel sales, which accounted for over 90% of the
Domestic private label sales, were up a strong 16% for the year due primarily
to growth in the private label programs with several key retailers. Operating
profits in the Domestic private label portfolio were improved as a result of
these successful programs. The Home Fashions business which represented the
remaining portion of the Domestic private label portfolio was sold in December
1994 at an after tax loss of approximately $1 million.

Sales by Far East operations were down 3% or $5 million for fiscal 1995.
Weak demand for woven dress shirts, intense margin pressure, and production
difficulties all contributed to significantly lower Far East margins.
Included in the results for the year and the loss for the fourth quarter is a
$14 million, or $0.65 per share, charge for closing Smart Shirts' plant in
Saipan.

Fiscal 1994's results were favorably impacted by a $3 million gain on
the disposal of certain excess export quota rights. The value of Hong Kong
quota has subsequently dropped. As a result, Kellwood only sold a small
amount of excess quota in 1995 realizing a negligible gain of $0.1 million.

The increase in amortization expense results from increased intangible
assets associated with recent acquisitions. The increase in interest expense
correlates with the increase in average outstanding debt. The increase in the
effective tax rate is primarily due to the shut-down of the Saipan facility
which closed in a net operating loss position and therefore did not result in
any significant tax deductions.

FINANCIAL CONDITION

The current ratio remained relatively constant at 1.7 to 1 at April 30,
1997, as compared to 1.8 to 1 at April 30, 1996. The decrease in the current
ratio was partially due to increased notes payable incurred to service current
year debt instalment payments and to fund inventory purchases in support of
the growth of the business. In addition, the timing of income tax payments
resulted in increased accrued expenses. Accounts payable has also increased
in line with inventory levels, which remain in balance with anticipated future
demand. The increase in accounts receivable correlates with a significant
increase in fourth quarter 1997 sales, as compared to the prior year.

Cash used for investing activities for the current year includes
approximately $7 million for the purchase of the assets of a small business
acquired to complement one of Kellwood's existing business units. Capital
expenditures for the prior year included approximately $5 million used to
purchase an office and warehouse facility for another Kellwood business unit.
There are no material commitments for capital expenditures as of April 30,
1997. During fiscal 1997, funds totaling $8 million were repatriated from the
Company's Far East operations, while no funds were repatriated during 1996 or
1995.

<PAGE> 24

Total debt represents 45% of capitalization at April 30, 1997, as
compared to 46% at April 30, 1996. Kellwood maintains a $300 million credit
facility agreement of which up to $200 million can be utilized for short-term
loans and up to $200 million can be utilized for letters of credit. At April
30, 1997, $170 million was available for future use. In September 1996, the
Board of Directors authorized the Company to repurchase up to 10% of the
outstanding shares of its common stock in the open market through privately
negotiated transactions at management's discretion and depending on market
conditions. As of April 30, 1997, the Company had purchased 324,000 shares at
a total cost of $5.8 million.

Cash provided by operations and borrowings under various lines of credit
are the primary sources of liquidity. The combined operating, cash and equity
position of the Company should continue to provide the capital flexibility
necessary to fund future opportunities as well as to meet existing
obligations.

OUTLOOK

Kellwood expects solid growth to continue in fiscal 1998 due to a
general improving trend in consumer demand and conditions at retail. In
addition, the turnaround taking place in our restructured divisions, steps we
have taken to enhance the price/value proposition of our products to the
consumer, and a number of new and expanding marketing programs and initiatives
across all three business portfolios are expected to contribute to our growth.

A portion of the earnings and cash flow generated by this growth will be
reinvested in management information systems and technology, and in
warehousing and distribution facilities. Such expenditures will be made in
keeping with the goals and objectives of Kellwood's Vision 2000 initiative.

<PAGE> 1

EXHIBIT 21

PARENTS AND SUBSIDIARIES

The Company and its subsidiaries<F*> as of June 30, 1997 are as follows:

<TABLE>
<CAPTION>
State (Country) of Percentage of Voting
Name of Company Incorporation Securities Owned
- --------------- ------------------ --------------------
<S> <C> <C>
Kellwood Company Delaware Parent
American Recreation Products, Inc. Delaware 100%
Kellwood Asia Limited Hong Kong 100%
Smart Shirts Limited Hong Kong 100%
Keeta Company Limited Hong Kong 100%
South Asia Garment Limited Hong Kong 100%
KWD Holdings, Inc. Delaware 100%
Robert Scott & David Brooks
Outlet Stores, Inc. Delaware 100%
Tri-W Corporation North Carolina 100%
Halmode Apparel, Inc. Delaware 100%
David Dart, Inc. California 100%
Force One, Inc. California 100%

<FN>
<F*> Some of the above subsidiaries also have subsidiaries which are not listed
because, in the aggregate, they are not considered to be significant.
</TABLE>

<PAGE> 1

EXHIBIT 24

POWER OF ATTORNEY
-----------------

The undersigned, a director of Kellwood Company (the "Company"), does
hereby constitute and appoint Thomas H. Pollihan his/her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him/her and in his/her name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 as Amended for the fiscal year ended April 30, 1997, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto the
attorney-in-fact full power and authority to sign such document on behalf of
the undersigned and to make such filing, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and
confirming all that the attorney-in-fact, or his substitutes, may lawfully do
or cause to be done by virtue hereof.

Dated: May 29, 1997

/s/ Raymond F. Bentele /s/ James C. Jacobsen
- ------------------------------- --------------------------------
Raymond F. Bentele James C. Jacobsen

/s/ Edward S. Bottum /s/ James S. Marcus
- ------------------------------- --------------------------------
Edward S. Bottum James S. Marcus

/s/ Kitty G. Dickerson /s/ William J. McKenna
- ------------------------------- --------------------------------
Kitty G. Dickerson William J. McKenna

/s/ Leonard A. Genovese /s/ Hal J. Upbin
- ------------------------------- --------------------------------
Leonard A. Genovese Hal J. Upbin

/s/ Jerry M. Hunter /s/ Fred W. Wenzel
- ------------------------------- --------------------------------
Jerry M. Hunter Fred W. Wenzel

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Kellwood
Company and Subsidiaries Condensed Consolidated Balance Sheet at April 30,
1997, and from the Condensed Consolidated Statement of Earnings and Condensed
Consolidated Statement of Cash Flows for the year ended April 30, 1997, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
<CASH> 22,513
<SECURITIES> 0
<RECEIVABLES> 277,165
<ALLOWANCES> 5,536
<INVENTORY> 298,938
<CURRENT-ASSETS> 621,524
<PP&E> 177,754
<DEPRECIATION> 114,954
<TOTAL-ASSETS> 874,587
<CURRENT-LIABILITIES> 374,410
<BONDS> 109,831
<COMMON> 99,077
0
0
<OTHER-SE> 248,737
<TOTAL-LIABILITY-AND-EQUITY> 874,587
<SALES> 1,521,005
<TOTAL-REVENUES> 1,521,005
<CGS> 1,211,548
<TOTAL-COSTS> 1,211,548
<OTHER-EXPENSES> 223,065
<LOSS-PROVISION> 2,262
<INTEREST-EXPENSE> 21,566
<INCOME-PRETAX> 64,826
<INCOME-TAX> 27,230
<INCOME-CONTINUING> 37,596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,596
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.75

</TABLE>