Registrant's telephone number, including area code:   (706) 645-4000
Securities registered pursuant to Section 12(b) of the Act:   None.
Securities registered pursuant to Section 12(g) of the Act:

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.      [X] Yes        [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.           [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).   [X] Yes    [ ] No

The aggregate market value of voting stock held by non-affiliates of the registrant as of the last business day of the registrant's most recently completed second fiscal quarter, June 30, 2003, was approximately $997,948.

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date: 49,897,409 at March 12, 2004.

None

On June 1, 2003, (the "Petition Date") WestPoint Stevens Inc., a Delaware corporation (the "Company"), and several of its subsidiaries (together with the Company, the "Debtors") filed a petition for reorganization under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") with the United States. Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). The Debtors are authorized to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On June 2, 2003, the Bankruptcy Court entered a number of orders enabling the Company to continue regular operations throughout the reorganization proceedings. On June 18, 2003, the Bankruptcy Court approved $300 million of debtor in possession financing pursuant to a Post-Petition Credit Agreement, dated as of June 2, 2003, among the Company and certain of its subsidiaries, the financial institutions named therein and Bank of America, N.A. and Wachovia Bank, National Association (the "DIP Credit Agreement"). For a more complete discussion of the DIP Credit Agreement see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- DIP Credit Agreement."

Since commencement of its chapter 11 cases, the Debtors have been operating as debtors in possession under chapter 11 and conducting business in the ordinary course. Pursuant to the Bankruptcy Code, pre-petition obligations of the Debtors (including obligations under debt instruments) generally may not be enforced against the Debtors, and any actions to collect pre-petition indebtedness are automatically stayed, unless the stay is lifted by the Bankruptcy Court. In addition, as debtors in possession, the Debtors have the right, subject to Bankruptcy Court approval and certain other limitations, to assume or reject executory contracts and unexpired leases.

The Company initially announced that it had reached an agreement in principle with the holders of approximately 52% of the aggregate principal amount of its 7-7/8% Senior Notes due 2005 and 7-7/8% Senior Notes due 2008 the "Senior Notes") on the terms of a financial restructuring to be implemented through the chapter 11 process. The agreement in principle was subject to numerous conditions and further agreements, including the entry of an order confirming the plan of reorganization contemplated by the proposal. On October 17, 2003, the Company announced that it had determined not to implement the previously announced agreement in principle. Instead, the Company intends to negotiate new terms for a chapter 11 plan of reorganization with all of its major creditor constituencies. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources" below.

The Company, which was organized in 1987, is the successor corporation to West Point-Pepperell, Inc. through a series of mergers occurring in December 1993. The Company operates its business directly and through its consolidated subsidiaries. The Company is a leading manufacturer, marketer and distributor of an extensive range of bed and bath home fashions ("Home Fashions") products. The Company's trademark brands include ATELIER MARTEX(r);, BABY MARTEX(r);, CHATHAM(r);, GRAND PATRICIAN(r);, MARTEX(r);, PATRICIAN(r);, UTICA(r);, STEVENS(r);, LADY PEPPERELL(r);, LUXOR(r); and VELLUX(r);. In addition, certain Home Fashions products are manufactured and sold pursuant to licensing agreements under designer names that include, among others, Ralph Lauren Home, Sanderson, Glynda Turley and Disney Home. The Company's products are marketed through leading department stores, mass merchants, specialty stores, institutional channels, and WestPoint Stevens Stores Inc.

The Company estimates that it has one of the largest market shares in the domestic sheet and pillowcase market, the domestic bath towel market and the domestic blanket market. The Company also has significant market share in the domestic accessories market, which includes comforters, bedspreads, bed pillows, throw pillows and mattress pads, among others.

As a result of a strategic review of the Company's businesses, manufacturing and other facilities and products, the Board of Directors has approved various restructuring initiatives designed to streamline operations and improve profitability. For a comprehensive discussion of the Company's restructuring initiatives and overall financial condition, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

Such products are made from a variety of fabrics, such as chambray, twill, sateen, flannel, linen, cotton and cotton blends and are available in a wide assortment of colors and patterns. The Company has positioned itself as a single-source supplier to retailers of bed and bath products, offering a broad assortment of products across multiple price points. Such product and price point breadth allows the Company to provide a comprehensive product offering for each major distribution channel. For each of the last three years all of the Company's products have consisted of Home Fashions products.

The Company's products are marketed under well-known and firmly established trademarks, brand names and private labels. The Company uses trademarks, brand names and private labels as merchandising tools to assist its customers in coordinating their product offerings and differentiating their products from those of their competitors. Registered trademarks include ATELIER MARTEX(r), BABY MARTEX(r), CHATHAM(r), GRAND PATRICIAN(r), MARTEX(r), PATRICIAN(r), UTICA(r), STEVENS(r), LADY PEPPERELL(r), LUXOR(r) and VELLUX(r). In addition, products are manufactured and sold pursuant to licensing agreements under designer names that include, among others, Ralph Lauren Home, Disney Home, Sanderson and Glynda Turley. A portion of the Company's sales is derived from licensed designer brands. The license agreements for the Company's designer brands generally are for a term of two or three years. Some of the licenses are automatically renewable for additional periods, provided that certain sales thresholds set forth in the license agreements are met. No single license has accounted for more than 13.5% of the Company's total sales volume during any of the last five fiscal years. Although the Company currently has no reason to believe that it will lose any of its licenses, the loss of a significant license could have a material adverse effect upon the Company's business. The licensing agreements with fixed expiration dates are: Ralph Lauren Home, December 31, 2005 (with an option to renew until December 31, 2008); Glynda Turley, December 31, 2005; and Disney Home, December 31, 2005. Both the license with Ralph Lauren Home and the license with Disney Home were modified in 2003 and assumed by the Company in the chapter 11 case.

Marketing

The Company is committed to developing and maintaining integral relationships with its customers through "Strategic Partnering," a program designed to improve customers' operating results by leveraging the Company's merchandising, manufacturing and inventory management skills. "Strategic Partnering" includes Electronic Data Interchange ("EDI") direct electronic entry systems, "Quick Response" and "Vendor Managed Inventory" customer delivery programs and point-of-sale processing. The Company incorporates Strategic Partnering into its planning, manufacturing and shipping systems, in order to enable it to anticipate and respond more efficiently and economically to customers' inventory requirements. This has assisted the Company to plan and forecast its own production and inventory requirements. Sales and marketing of the Company's Home Fashions products are conducted through an organizational format consisting of divisions for Bed and Bath Products and Basic Bedding Products, each with supporting domestic sales, marketing and merchandising teams and international sales and marketing teams. Distribution specific teams focused on targeted key accounts are linked with product management, operations, customer service and distribution to service each segment of retail. In response to industry trends during the past three years, the Company has focused on the fastest growing product categories in the home fashions industry (bedding and bath accessories and basic bedding products), and on the fastest growing distribution channels such as

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discount retailers, specialty stores and warehouse clubs. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Executive Summary."

The Company works closely with its major customers to assist them in merchandising and promoting its products to consumers. In addition, the Company periodically meets with its customers in an effort to maximize product exposure and sales and to jointly develop merchandise assortments and plan promotional events specifically tailored to the customer. The Company provides merchandising assistance with store layouts, fixture designs, advertising and point-of-sale displays. A national consumer and trade advertising campaign and comprehensive internet website have served to enhance brand recognition. The Company also provides its customers with suggested customized advertising materials designed to increase its product sales. A heightened focus on consumer research provides needed products on a continual basis.

Approximately 87% of the Company's total sales in 2003 were made to retail establishments in the United States, including catalog retailers, chain and department stores, mass merchants, specialty bed and bath stores, warehouse clubs and WestPoint Stores. Finished products are distributed to retailers directly from the Company's plants. The majority of the remaining portion of the Company's sales of Home Fashions products are through the institutional channel, which includes hospitality and healthcare establishments, as well as laundry supply businesses. In addition to domestic sales, the Company distributes its Home Fashions products for eventual sale in certain foreign markets, principally Australia, Canada, Mexico, the United Kingdom, continental Europe, the Middle East and the Far East. International operations accounted for approximately 4% of the total sales of the Company in 2003. On August 28, 2003, one of the Company's foreign subsidiaries, WestPoint Stevens (Europe) Ltd.,commenced an insolvency proceeding in the United Kingdom and is in the process of being closed and liquidated.

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The Company has been recognized as a leader and innovator of advanced technology, as evidenced by its inclusion in the 2003 InformationWeek 500, which recognizes businesses that make innovative use of information technology. The Company deploys a variety of innovative, leading-edge e-commerce applications and has been selected as a preferred vendor for many customers wishing to participate in web-based collaboration programs, Quick Response, EDI and Vendor Managed Inventory. The Company utilizes collaborative planning, forecasting and replenishment practices supported by systems from leading technology providers such as i2Technologies, Inc., GlobalNetXchange LLC and Syncra Systems, Inc. It operates a retail merchandising and inventory replenishment system (Inforem(r)) in conjunction with its forecasting and planning system (Demand Planner(r) from i2 Technologies, Inc.). It also utilizes ESSBASE(r) business intelligence tools for inventory optimization and performance measurement to complement the Company's core business systems, including its supply chain, sourcing and logistics systems. The Company combines the use of an advanced, customer order fulfillment system, real-time radio frequency and in-line label printing distribution systems, and in-house transportation to compress the order to delivery cycle time, maintain low inventory levels and achieve high customer scorecard objectives. The Company has placed a strong emphasis on the supply chain and logistics function and believes that continued investment in planning, sourcing, distribution and transportation capabilities will enhance its ability to provide its customers with superior service.

The Company is pursuing strategic relationships with key merchandisers. An important component of the Company's strategy is to increase its share of shelf and floor space by strengthening its partnership with its customers. The Company is working closely with retailers and is sharing information and business practices with them to improve service and achieve higher profitability for both the retailer and the Company.

The Company's Home Fashions products are sold to catalog retailers, chain stores, mass merchants, department stores, specialty stores, warehouse clubs and its own retail stores. The Company's six largest customers, Costco Wholesale Corp., Federated Department Stores, Inc., J.C. Penney Company, Inc., Kmart Corporation, Target Corporation and Wal-Mart Stores, Inc. accounted for approximately 52% of the net sales of the Company during the fiscal year ended December 31, 2003. In 2003, sales to Target Corporation and Wal-Mart Stores, Inc. were 14% and 11%, respectively, of the net sales of the Company. Each of such customers has purchased goods from the Company in each of the last 10 years. Although the Company has no reason to believe that it will lose the business of any of its largest customers, a loss of any of these accounts (or a material portion of any thereof) would have an adverse effect upon the Company's business, which could be material.

On January 22, 2002, Kmart Corporation filed a voluntary petition for reorganization under chapter 11 of title 11 of the Bankruptcy Code. Kmart Corporation subsequently received approval of its plan of reorganization and emerged from chapter 11 on May 6, 2003. In conjunction with the restructuring, Kmart Corporation initially announced the closing of 284 retail store locations and, on January 14, 2003, announced the closing of 318 additional stores. The collective closings represent approximately 28% of its total store base.

Manufacturing

The Company currently uses the latest manufacturing and distribution equipment and technologies in its mills. Management therefore believes that the Company is one of the most efficient manufacturers in the home fashions industry. Over the past five years, the Company has spent approximately $351 million to modernize its manufacturing and distribution systems and has spent approximately $19 million of that amount during 2003. The capital expenditures have been used to, among other things, further automate the Company's cut and sew operations and modernize yarn processing. The Company intends to invest approximately $35 million in capital improvements in the aggregate in 2004, which includes the further automation of the cut and sew operations, continued modernization and upgrading of distribution centers and the conversion of certain sheet product manufacturing operations to bath product manufacturing. These capital programs have resulted, and are expected to continue to result, in improved product quality, increased efficiency, lower costs and shorter response time to customer orders. As of March 1, 2004, the Company (including its subsidiaries) owns and utilizes 21 manufacturing facilities and leases and utilizes four manufacturing facilities. These facilities are located primarily in the Southeastern United States. As a result of our increased sourcing efforts, the Company has reduced its domestic capacity. See "Item 2. Properties."

The Company has had a long-standing history of domestic and international sourcing of selected component products such as specialty yarns and specialty greige sheeting fabric for use in domestic production of Home Fashions products. Historically,

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the percentage of sourced components used in domestic production was not material. However, beginning in 2000, increased focus was placed on global sourcing. As such, the Company today views sourcing as a means to drive business growth and improve profitability by providing products and services that accelerate product and packaging innovation resulting in a competitive market advantage. In 2003, the Company imported both component and finished products from 23 countries and has established strong relationships in several key export countries including China, India, Pakistan and Turkey. To accelerate speed to market and improve customer service, the Company maintains third party logistics' operations on the east coast. The Company continues to increase the number of sourced product categories and estimates that sales from sourced products accounted for roughly 22% of the Company's sales in 2003. Through global sourcing operations, the categories of product offerings by the Company to its customers has been significantly expanded to increase focus on high growth product categories such as bath accessories, rugs and quilts.

The Company's policy on sourcing prohibits the purchase of merchandise that is produced in whole or in part by indentured, prison or illegal immigrant or child labor. The Company requires that vendors certify the locations used for the production of products it purchases and that the vendors submit to compliance inspections from the Company or its representatives to ensure that the Company does not do business with suppliers who violate human rights.

The principal raw materials used in the manufacture of Home Fashions products are cotton of various grades and staple lengths, polyester and nylon in staple and filament form. Cotton, polyester and nylon presently are available from several sources in quantities sufficient to meet the Company's requirements. The Company is not dependent on any one supplier as a source of raw materials. Since cotton is an agricultural product, its supply and quality are subject to weather patterns, disease and other factors. The price of cotton is also influenced by supply and demand considerations, both domestically and worldwide, and by the cost of polyester. Although the Company has always been able to acquire sufficient quantities of cotton for its operations in the past, any shortage in the cotton supply by reason of weather, disease or other factors could adversely affect the Company's operations. The price of man-made fibers such as polyester and nylon is influenced by demand, manufacturing capacity and costs, petroleum prices, cotton prices and the cost of polymers used in producing man-made fibers. Any significant prolonged petrochemical shortages could significantly affect the availability of man-made fibers and cause a substantial increase in demand for cotton, resulting in decreased availability and, possibly, increased price. The Company also purchases substantial quantities of dyes and chemicals. Dyes and chemicals have been and are expected to continue to be available in sufficient supply from a wide variety of sources. The Company also purchases feathers and down for use as fill for certain products it produces which it had previously sourced.

Traditionally, the home fashions industry has been seasonal, with peak sales in the fall. In accordance with industry practice, the Company increases its Home Fashions' inventory levels during the first six months of the year to meet customer demands for the fall peak season. The Company's commitment to EDI, Quick Response and Vendor Managed Inventory, however, has facilitated a more even distribution of products throughout the calendar year and reduced some of the need to stockpile inventory to meet peak season demands. Inventory imbalances are typical during recessions; however, the impact of technology on excess inventory management was unusual during the most recent recession. Technology has allowed for real time information on inventory levels relative to sales levels, and retailers now respond much faster to slower sales by cutting orders and reducing forecasts. Because the Company produces the majority of its inventory to a sales forecast versus an order backlog in order to provide rapid replenishment service to its customers, the quick reduction of inventory at retail by customers has required the Company to curtail production levels in each of the past three years in order to avoid producing significant quantities of excess inventory.

The home fashions industry is also cyclical. While the Company's performance may be negatively affected by downturns in consumer spending, management believes the effects thereof are somewhat mitigated by the Company's large market shares and broad distribution base.

The backlog of the Company's unfilled customer orders, believed by management to be firm, was approximately $71.8 million at February 1, 2004, as compared with approximately $67.1 million at February 1, 2003. The Company does not believe that its backlogs are a meaningful indicator of its business due in part to its use of Vendor Managed Inventory systems.

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The home fashions industry is highly competitive. The Company competes on the basis of price, quality, design and customer service, among other factors. In the sheet, towel and blanket markets, the Company competes primarily with Springs Industries, Inc. In the other bedding and accessories markets, the Company competes with many companies, most of which are much smaller in size than the Company. The Company has pursued a competitive strategy focused on providing the best fashion, quality, service and value to its customers and to the ultimate consumer. There has been an increase in the sale of imported Home Fashions products in the domestic market and the Company is actively pursuing its own foreign sourcing opportunities to meet the demand for such products. This increase is expected to intensify with the lifting of import quotas in the year 2005. There can be no assurance that foreign competition will not grow to a level that could have a material effect upon the Company's ability to compete effectively.

The Company's operations also include Grifftex Chemicals ("Grifftex") which formulates chemicals primarily used in the Company's finishing processes, and WestPoint Stevens Graphics ("Graphics"), which prints product packaging and labeling. Neither Grifftex nor Graphics represent a material portion of the Company's business.

Management believes that research and development in product innovation and differentiation is important to maintain the Company's competitive edge. The Company continually seeks to develop new specialty finishes and finishing techniques that would improve fabric quality and enhance fabric aesthetics. Research also is conducted to develop new products in response to changing customer demands and environmental concerns. The Company has continued to invest in product development to maintain a leadership position in the market place.

The Company is subject to various federal, state and local environmental laws and regulations governing, among other things, the storage, handling, usage, discharge and disposal of a variety of hazardous and non-hazardous substances and wastes used in or resulting from its operations, including, but not limited to, the Water Pollution Control Act, as amended; the Clean Air Act, as amended; the Resource Conservation and Recovery Act, as amended; the Toxic Substances Control Act; and the Comprehensive Environmental Response, Compensation and Liability Act.

The Company's operations also are governed by laws and regulations relating to employee safety and health, principally the Occupational Safety and Health Act and regulations thereunder which, among other things, establish exposure limitations for cotton dust, formaldehyde, asbestos and noise, and regulate chemical, physical and ergonomic hazards in the workplace.

Although the Company does not expect that compliance with any of the aforementioned laws and regulations will have a material adverse effect on its capital expenditures, earnings or competitive position in the foreseeable future, there can be no assurances that environmental requirements will not become more stringent in the future or that the Company will not incur significant costs in the future to comply with such requirements.

The Company (including its subsidiaries) employed approximately 13,886 active employees as of February 29, 2004. The Company believes that its relations with its employees are excellent. The Company has not experienced a strike or work stoppage by any of its unionized employees during the past 20 years. Currently, less than 10% of the Company's employees are unionized.

The Company has developed an effective employee relations and communications program that includes rules and regulations for employee conduct and procedures for employee complaints. This long-standing program focuses on and, in the view of management, has resulted in, strong, positive employee relation's practices, good working conditions, progressive human resources policies and expansive safety programs.

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This Annual Report on Form 10-K includes "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, with respect to the Company's business, financial condition and results of operations. Statements that use the terms "believe," "anticipate," "expect," "plan," "intend," "estimate," "project" and similar expressions in the affirmative and the negative are intended to identify forward-looking statements. These statements reflect the Company's current views with respect to future events and are based on current assumptions, expectations, estimates and projections about the Company's business and the markets in which it operates and are subject to risks and uncertainties. Actual events (including the Company's results) could differ materially from those anticipated in these forward-looking statements as a result of various factors which include, but are not limited to, the following: uncertainties exist related to the Company's having filed a chapter 11 petition and the reorganization proceedings resulting therefrom; product margins may vary from those projected; raw material prices may vary from those assumed; additional reserves may be required for bad debts, returns, allowances, governmental compliance costs or litigation; there may be changes in the performance of financial markets or fluctuations in foreign currency exchange rates; unanticipated natural disasters could have a material impact upon results of operations; there may be changes in the general economic conditions which affect customer payment practices or consumer spending; competition for retail and wholesale customers, pricing and transportation of products may vary from time to time due to seasonal variations or otherwise; customer preferences for our products can be affected by competition, or general market demand for domestic or imported goods or the quantity, quality, price or delivery time of such goods; there could be an unanticipated loss of a material customer or a material license; there may be changes in governmental standards for the Company's products that materially affect the cost of production or availability of raw materials; the availability and price of raw materials could be affected by weather, disease, energy costs or other factors. In addition, consideration should be given to any other risks and uncertainties discussed in other documents filed by the Company with the Securities and Exchange Commission. Except as required by applicable law, the Company assumes no obligation to update or revise publicly any forward-looking statements, whether as the result of new information, future events or otherwise.

The Company's properties are owned or leased directly and indirectly through its subsidiaries. Management believes that the Company's facilities and equipment are in good condition and sufficient for current operations. The Company owns office space in West Point, Georgia, and Valley, Alabama, and leases various additional office space, including approximately 140,000 square feet in New York City, of which approximately 36,000 square feet is subleased to other tenants. The Company also leases approximately 14,000 square feet elsewhere for other administrative, storage and office space.

The Company and its subsidiaries own and utilize 21 manufacturing facilities located in Alabama, Florida, Georgia, Indiana, Maine, North Carolina, South Carolina and Virginia which contain in the aggregate approximately 8,258,000 square feet of floor space and lease and utilize four manufacturing facilities in Alabama, Louisiana, Nevada and North Carolina which contain in the aggregate approximately 682,000 square feet of floor space.

The Company owns a chemical plant containing approximately 43,000 square feet of floor space from which Grifftex Chemicals operates. In addition, the Company owns a printing facility consisting of 38,000 square feet in which Graphics prints product packaging and labeling.

The Company and its subsidiaries also own and operate 11 distribution centers and warehouses for their operations which contain approximately 3,727,000 square feet of floor space. In addition, the Company and its subsidiaries lease and operate five distribution outlets and warehouses containing approximately 725,000 square feet of floor space.

WestPoint Stores owns two retail stores and leases its 35 other retail stores, all of which are dispersed throughout the United States and Canada.

The properties owned by the Company are subject to liens held by the Company's secured lenders. See "Item 8. Financial Statements and Supplementary Data -- Notes to Consolidated Financial Statements -- 3. Indebtedness and Financial Arrangements."

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Except as stated below, as of the Petition Date, the following actions in which the Company is a defendant have been enjoined from further proceedings pursuant to section 362 of the Bankruptcy Code. To the extent parties have filed timely proofs of claim, the Bankruptcy Court will determine the amount of their pre-bankruptcy claims against the Company. In certain instances, the Bankruptcy Court may permit actions to proceed to judgment for the purpose of determining the amount of the pre-bankruptcy claim against the Company. Lawsuits based on facts arising solely after the commencement of the Company's chapter 11 case are not stayed by section 362 of the Bankruptcy Code.

On October 5, 2001, a purported stockholder class action suit, entitled Norman Geller v. WestPoint Stevens Inc., et al. (the "Geller action"), was filed against the Company and certain of its former officers and directors in the United States District Court for the Northern District of Georgia. (A subsequent and functionally identical complaint was also filed.) The actions were consolidated by Order dated January 25, 2002. Plaintiffs served a Consolidated Amended Complaint (the "Amended Complaint") on March 29, 2002. The Amended Complaint asserts claims against all Defendants under section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and against the Company and Defendant Holcombe T. Green, Jr. as "controlling persons" under section 20(a) of the Exchange Act. The Amended Complaint alleges that, during the putative class period (i.e., February 10, 1999, to October 10, 2000), the Company and certain of its officers and directors caused false and misleading statements to be issued regarding, inter alia, alleged overcapacity and excessive inventories of the Company's towel-related products and customer demand for such products and that certain Individual Defendants wrongfully sold or pledged Company stock at inflated prices for their benefit. The Amended Complaint refers to the Company's press releases and quarterly and annual reports on Securities Exchange Commission Forms 10-Q and 10-K, which discuss the Company's results and forecasts for the fiscal years 1999 and 2000. Plaintiffs allege that these press releases and public filings were false and misleading because they failed to disclose that the Company allegedly "knew sales would be adversely affected in future quarters and years." Plaintiffs also allege in general terms that the Company materially overstated revenues by making premature shipments of products.

On June 6, 2002, Defendants filed Motions to Dismiss Plaintiffs' Amended Complaint. On February 3, 2003, the court denied Defendants' Motions to Dismiss.

The Company has been informed by its counsel that its insurance carrier has reached an agreement in principle to settle the Geller action at no cost to the Company, subject to definitive documentation and approvals of the court and the Bankruptcy Court.

On March 11, 2002, a shareholder derivative action, entitled Gordon Clark v. Holcombe T. Green, Jr., et al. (the "Clark action"), was filed against certain of the Company's former directors and officers in the Superior Court of Fulton County, Georgia. The Complaint alleges that the named individuals breached their fiduciary duties by acting in bad faith and wasting corporate assets. The Complaint also asserts claims under Georgia Code Ann. sections 14-2-740 to 14-2-747 and 14-2-831. The claims are based on the same or similar facts as are alleged in the Geller action.

On July 1, 2002, a shareholder derivative action, entitled John Hemmer v. Holcombe T. Green, Jr., et al. (the "Hemmer action"), was filed against Mr. Green and certain of the Company's other current and former directors including Messrs. Hugh M. Chapman, John F. Sorte and Ms. M. Katherine Dwyer in the Court of Chancery in the State of Delaware in and for New Castle County. The Complaint alleges that the named individuals breached their fiduciary duties and knowingly or recklessly failed to exercise oversight responsibilities to ensure the integrity of the Company's financial reporting. The Complaint also asserts that certain of the named individuals used proprietary Company information in selling or pledging Company stock at inflated prices for their benefit. The claims are based on the same or similar facts as are alleged in the Geller action.

By agreements between the parties, the Clark and Hemmer actions were both stayed pending entry of final judgment by the Court in the Geller action. As with the Geller action, the Clark and Hemmer actions were also stayed due to the Company's bankruptcy filing.

The Company believes that the allegations in all of the actions are without merit and intends to contest the actions vigorously on behalf of its current and former officers and directors.

The Company has been informed by its counsel that its insurance carrier is engaged in negotiations to settle the Clark and Hemmer actions.

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On March 21, 2002, an Adversary Complaint of Debtors and Debtors in Possession Against WestPoint Stevens Inc. was filed by Pillowtex, Inc., a Delaware corporation, et al., and Pillowtex Corporation, et al., against the Company in the United States Bankruptcy Court for the District of Delaware. Pillowtex Corporation and its related and affiliated companies ("Pillowtex") as Debtors and Debtors in Possession allege breach of a postpetition contract (the "Sale Agreement") dated January 31, 2001, among Pillowtex, Ralph Lauren Home Collection, Inc. ("RLH") and Polo Ralph Lauren Corporation ("PRLC") collectively referred to as "Ralph Lauren" and the Company. Pillowtex alleges that the Company refused to perform its purchase obligation under the Sales Agreement and is liable to it for $4,800,000 plus potentially significant other consequential damages. The Company believes that the complaint is without merit and intends to contest the action vigorously. The case is currently stayed due to the Company's bankruptcy filing.

The Company has been named as a defendant in three separate purported class action suits seeking reparation for the historic enslavement of African Americans in the United States. Eddlee Bankhead v. Lloyd's of London, et al. (the "Bankhead action") was filed on September 3, 2002, in the United States District Court for the Southern District of New York. Timothy Hurdle and Chester Hurdle v. FleetBoston Financial Corporation, et al. was initially filed in the California Superior Court for San Francisco County on September 10, 2002, but has since been removed to the United States District Court for the Northern District of California San Francisco. Julie Mae Wyatt-Kerwin v. J.P. Morgan Chase was filed January 21, 2003, in the United States District Court for the Southern District of Texas. All three cases have been consolidated with related cases in the U.S. District Court for the Northern District of Illinois. The factual basis for all three suits is the claim that the defendants profited from the slave labor of the plaintiff classes' ancestors prior to 1865 and, specifically, that Pepperell Manufacturing, predecessor to WestPoint Stevens Inc., utilized cotton from southern planters who in turn purchased finished product to clothe their slaves. The California suit alleges that such practices amount to an "unfair business practice" in violation of the California Business and Professional Code.

The purported class includes all descendants of African American slaves. The relief sought includes an accounting, the appointment of an independent historical commission, imposition of a constructive trust, restitution of the value of slave labor and defendants' unjust enrichment, disgorgement of illicit profits and compensatory and punitive damages.

The consolidated cases are currently stayed, as to the Company, due to the Company's bankruptcy filing, and on January 26, 2004, the District Court granted defendants' motion to dismiss without prejudice.

The Company is subject to various federal, state and local environmental laws and regulations governing, among other things, the discharge, storage, handling and disposal of a variety of hazardous and nonhazardous substances and wastes used in or resulting from its operations and potential remediation obligations thereunder. Certain of the Company's facilities (including certain facilities no longer owned or utilized by the Company) have been cited or are being investigated with respect to alleged violations of such laws and regulations. The Company is cooperating fully with relevant parties and authorities in all such matters. The Company believes that it has adequately provided in its financial statements for any expenses and liabilities that may result from such matters. The Company also is insured with respect to certain of such matters. The Company's operations are governed by laws and regulations relating to employee safety and health which, among other things, establish exposure limitations for cotton dust, formaldehyde, asbestos and noise, and regulate chemical and ergonomic hazards in the workplace.

Although the Company does not expect that compliance with any of such laws and regulations will adversely affect the Company's operations, there can be no assurance such regulatory requirements will not become more stringent in the future or that the Company will not incur significant costs in the future to comply with such requirements.

The Company and its subsidiaries are involved in various other legal proceedings, both as plaintiff and as defendant, which are normal to its business. It is the opinion of management that the aforementioned actions and claims, if determined adversely to the Company, will not have a material adverse effect on the financial condition or operations of the Company taken as a whole.

During the fourth quarter of fiscal year 2003, no matters were submitted by the Company to a vote of its security holders.

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The Common Stock of the Company is listed on the Over the Counter Bulletin Board ("OTCBB") under the ticker symbol "WSPT."  Such listing became effective on January 30, 2003. Prior thereto, the Company's Common Stock was listed on the New York Stock Exchange ("NYSE") under the ticker symbol WXS from October 15, 1999.

The following table presents the high and low sales prices of the Company's Common Stock as reported by the NYSE and the high and low bid prices as reported by the OTCBB, as applicable, for each full quarterly period within the two most recent fiscal years:

As of February 23, 2004, there were approximately 3,790 holders of the Company's Common Stock. Of that total, approximately 290 were stockholders of record and approximately 3,500 held their stock in nominee name through the Depository Trust Company.

The Company currently anticipates that all of the currently outstanding shares of its Common Stock will be cancelled pursuant to the plan of reorganization which it will propose under chapter 11 of the Bankruptcy Code.

Website Access

Our website address is www.westpointstevens.com. You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports at our investor relations website, www.investorwestpoint.com/performance/index.asp, under the heading "SEC Filings." You may also find our Code of Business Conduct and Ethics and our Audit Committee Charter on our website under the heading "Corporate Governance." These reports are available on our investor relations website as soon as reasonably practicable after we electronically file them with the SEC. The information on our website is not part of or incorporated by reference in this Annual Report on Form 10-K.

11

The following table sets forth information as of December 31, 2003, (except as otherwise specified in the footnotes).