8-K

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549


                            FORM 8-K


                     CURRENT REPORT PURSUANT
                  TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934


   Date  of report (Date of earliest event reported):    May  17,
2006 (May 12, 2006)

                        Innovo Group Inc.
     (Exact Name of Registrant as Specified in Its Charter)

                            Delaware
         (State or Other Jurisdiction of Incorporation)

            0-18926                        11-2928178
    (Commission File Number)   (IRS Employer Identification No.)


5804 East Slauson Avenue, Commerce, California       90040
(Address of Principal Executive Offices)           (Zip Code)

                         (323) 725-5516
      (Registrant's Telephone Number, Including Area Code)

                               N/A
  (Former Name or Former Address, if Changed Since Last Report)

   Check  the  appropriate box below if the Form  8-K  filing  is
intended to simultaneously satisfy the filing obligation  of  the
registrant  under  any of the following provisions  (see  General
Instruction A.2. below):

  [ ] Written  communications pursuant  to  Rule  425  under  the
Securities Act (17 CFR 230.425)

  [ ] Soliciting  material  pursuant to  Rule  14a-12  under  the
Exchange Act (17 CFR 240.14a-12)

  [ ] Pre-commencement communications pursuant to  Rule  14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))

  [ ] Pre-commencement communications pursuant to  Rule  13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))



ITEM 1.01  Entry into a Material Definitive Agreement

Compensation Arrangements

      On  May  12,  2006,  Innovo Group  Inc.,  or  the  Company,
conducted  an  annual meeting of its Board of Directors,  or  the
Board.   At  such  annual  meeting, the  Board  approved  certain
resolutions  relating to compensation for itself  and  its  named
executive  officers.  First, the Compensation  Committee  of  the
Board  approved an stock option grant pursuant to  the  Company's
2004  Stock Incentive Plan for services as a member of the  Board
to  each  of  its  non-employee directors  in  the  amount  of  a
nonqualified  option  to  purchase up to  75,000  shares  of  the
Company's common stock at $1.02, which was the closing  price  of
the  Company's  common stock on May 12, 2006.  Each  option  will
have a term of ten (10) years from the date of grant and will  be
exercisable in full immediately.  The Board does not receive  any
cash  compensation  other  than reimbursement  for  ordinary  and
customary  business expenses incurred in connection  with  travel
and attendance at meetings.

      In  addition,  the  Compensation  Committee  of  the  Board
authorized  a direct amendment in accordance with the 2004  Stock
Incentive  Plan to certain of the options previously  granted  to
Marc  Crossman and Richard Quiroga, the Company's Named Executive
Officers,  to reduce the exercise price to $1.02, which  was  the
closing price of the Company's common stock on May 12, 2006.  Mr.
Crossman  also  forfeited  a previous option  grant  to  purchase
1,000,000  shares of the Company's common stock pursuant  to  the
Company's  2000 Employee Stock Incentive Plan in exchange  for  a
new  option to purchase 1,000,000 shares of the Company's  common
stock  at $1.02 pursuant to the 2004 Stock Incentive Plan.   This
option will have a term of ten (10) years from the date of  grant
and be exercisable in full immediately.

      The  Compensation Committee also evaluated  Mr.  Crossman's
annual salary and made no changes to it.


ITEM 2.01 Completion of Acquisition or Disposition of Assets

     As previously disclosed in our Quarterly Report on Form 10-Q
for  the period ended February 25, 2006 filed with the Securities
and  Exchange Commission on April 6, 2006, the Company  announced
that  on  March  31,  2006, the Company  entered  into  an  Asset
Purchase  Agreement, or APA, with Cygne Designs, Inc., or  Cygne.
Cygne is a designer, merchandiser and manufacturer of branded and
private  label women's denim, casual and career apparel with  its
principal executive offices in New York, NY.

     Pursuant  to  the APA, the Company agreed to sell  to  Cygne
certain  assets  related to its private label  apparel  division.
These assets included the private label division's customer list,
the  assumption of current workforce related to the private label
division,  the  assumption of all existing  purchase  orders  and
inventory  related  to  the  private  label  division,  and   the
assumption  of the benefit of a non-compete clause  in  favor  of
Azteca.   In  exchange  for the purchased assets,  Cygne  assumed
certain  liabilities associated with the Company's private  label
division, including, the remaining obligation under the  original
promissory   note   executed  in  favor  of   Azteca   Production
International,  Inc. under the original asset purchase  agreement
pursuant to which it purchased the private label division assets,
or  the  Blue  Concept APA, all other liabilities, excluding  the
original  promissory note, owed in connection with our  operation
of  the private label division to Azteca in excess of $1,500,000,
all  liabilities associated with our outstanding purchase  orders
and inventory schedules listed in the APA, and the obligation  to
continue  to  pay the earn out under the Blue Concept  APA.   The
aggregate  value of the assumed liabilities, which will represent
the   purchase   price  for  the  transaction,  is  approximately
$10,437,000, and may be subject to certain post closing permitted
adjustments related to the payment of certain audit related fees.



     On  May  12, 2006, the Company completed the disposition  of
these assets after obtaining stockholder approval to approve  the
sale  of  certain  of  the assets of the private  label  division
pursuant  to  the  APA.   The  aggregate  value  of  the  assumed
liabilities remained at $10,437,000 as of the closing date.

     On  May  16,  2006,the Company issued  a  press  release  in
connection  with its annual meeting of stockholders held  on  May
12,  2006  announcing the approval of the four proposals  on  the
ballot: (1) the election of seven directors, (2) the approval  of
the sale of certain assets of the private label division pursuant
to  an  asset purchase agreement by and among Cygne, IAA and  the
Company dated March 31, 2006, (3) the approval of any proposal to
adjourn  the  meeting to a later date, if necessary,  to  solicit
additional proxies if there are not sufficient votes in favor  of
the  approval of the sale of certain assets of the private  label
division, and (4) the ratification of the appointment of Ernst  &
Young   LLP  as  Innovo  Group's  independent  registered  public
accounting  firm  for the fiscal year ending November  25,  2006.
The  Press Release is attached hereto and incorporated herein  by
reference as Exhibit 99.1 to this Current Report on Form 8-K.

ITEM  5.02 Departure of Directors or Principal Officers; Election
of Directors; Appointment of Principal Officers

      In  connection with the annual meeting of the Board on  May
12,  2006,  the Board appointed Marc Crossman to the position  of
Chief Executive Officer, President and Chief Financial Officer.

ITEM 8.01 Other Events

     On  April  21,  2006, the Company filed a  Definitive  Proxy
Statement  on  Schedule  14A  with the  Securities  and  Exchange
Commission  relating to an annual meeting of our stockholders  to
be  held on May 12, 2006.  The purpose of the annual meeting  was
to  vote on the following proposals: (1) to elect seven directors
to  serve on the Board of Directors until the next annual meeting
of  stockholders or until their respective successors are elected
and  qualified; (2) to approve the sale of certain assets of  the
private label division pursuant to an asset purchase agreement by
and among Cygne, IAA and the Company dated March 31, 2006; (3) to
approve  any proposal to adjourn the meeting to a later date,  if
necessary,  to  solicit  additional  proxies  if  there  are  not
sufficient votes in favor of the approval of the sale of  certain
assets  of  the  private label division; and (4)  to  ratify  the
appointment  of  Ernst & Young LLP as our independent  registered
public  accounting  firm for the fiscal year ended  November  25,
2006.  The Board fixed the close of business on April 12, 2006 as
the  record  date for identifying those stockholders entitled  to
notice  of,  and to vote, at the annual meeting.   On  April  21,
2006,  the  notice of annual meeting, proxy statement  and  proxy
cards  were first mailed to stockholders along with the Company's
Annual Report on Form 10-K for the fiscal year ended November 26,
2005.   On May 12, 2006, the Company conducted its annual meeting
of  stockholders and all four proposals were approved.

      On May 12, 2006, a maximum amount of 31,463,889 shares were
represented in person or by proxy at the meeting, which reflected
approximately  94%  of  total  shares  outstanding,   which   was
33,408,598 as of April 12, 2006 according to the records  of  our
transfer  agent,  the  record date of the annual  meeting.   This
share  amount  reflects the addition of certain shares  that  the
Company  holds  as  treasury  shares in  a  segregated  brokerage
account.  The vote totals on the four proposals were as follows:



1.   Election of seven directors: For        Against     Abstain

          Samuel J. Furrow        29,825,795   173     2,199,142

          Samuel J. Furrow, Jr.   29,670,244   173     2,354,693

          Marc B. Crossman        30,100,337   173     1,924,600

          Kelly Hoffman           31,117,860   173       907,077

          Tom O'Riordan           31,399,847   173       625,090

          Suhail R. Rizvi         28,742,567   173     3,282,370

          Kent Savage             30,598,209   173     1,426,728


                                    For        Against   Abstain

2.   The  approval of the sale  of  20,307,837 50,774    326,923
certain   assets  of  the  private
label  division  pursuant  to   an
asset  purchase agreement  by  and
among  Cygne, IAA and the  Company
dated March 31, 2006


                                    For        Against   Abstain

3.   The  approval of any proposal  29,374,751 2,215,979 434,378
to  adjourn the meeting to a later
date,  if  necessary,  to  solicit
additional  proxies if  there  are
not  sufficient votes in favor  of
the   approval  of  the  sale   of
certain   assets  of  the  private
label division

                                    For        Against    Abstain

4.    Appointment of Ernst & Young  31,474,300 195,799     355,010
LLP as
independent   registered    public
accounting  firm  for  the  fiscal
year ending November 25, 2006


ITEM 9.01 Financial Statements and Exhibits

(d)  Exhibits.

Exhibit
Number         Description

99.1           Press Release dated May 16, 2006



                           SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                              INNOVO GROUP INC.
                              (Registrant)

Date:  May 17, 2006           By:  /s/ Marc Crossman
                                   Marc Crossman
                                   Chief Executive Officer, Chief
                                   Financial Officer and Director
                                   (Principal Executive Officer
                                   and Principal Financial
                                   Officer)



                          Exhibit Index

Exhibit
Number         Description


99.1           Press Release dated May 16, 2006

EX-99

[INNOVO GROUP INC. LETTERHEAD]





      Innovo Group Completes Sale of Private Label Business

Innovo Group Announces Results of Annual Meeting of Stockholders


LOS  ANGELES,  May  16, 2006 - Innovo Group Inc.  (NASDAQ:  INNO)
announced  today that it has completed the sale of the assets  of
its  private  label apparel division.  In addition,  the  Company
announced the results from its annual stockholders' meeting  held
on May 12, 2006.  The voting results of the annual meeting are as
follows:

   --  A majority of the shares outstanding voted in person or by
  proxy in favor of the proposal to approve the sale of the assets
  of the Company's private label apparel division to Cygne Designs,
  Inc.  (NASDAQ: CYDS).  A total of approximately 20.3 million
  shares voted in favor of this proposal.

   --A majority of the shares present in person or by proxy voted
  in favor of the ratification of the appointment of Ernst & Young
  LLP as the Company's independent registered public accounting
  firm for the fiscal year ending November 25, 2006.

   --The seven director nominees who received the highest number
   of votes for election to the Company's Board of Directors were:
   Samuel  Furrow, Samuel J. Furrow, Jr., Marc Crossman,  Kelly
   Hoffman, Suhail Rizvi, Kent Savage, and Tom O'Riordan.

   --A total of approximately 32 million shares of the Company's
   common stock were represented by proxy at the annual meeting,
   which reflected approximately 96% of the total shares outstanding
   as of the April 12, 2006 record date.

  The  Company  also  announced that  immediately  following  the
annual  meeting  of stockholders, at the annual  meeting  of  the
Board of Directors, the newly elected Board voted unanimously  to
re-elect Sam Furrow as Chairman.

  Marc  Crossman,  Chief Executive Officer and director,  stated,
"We  are  extremely pleased with the results of our  2006  annual
stockholders' meeting, and are further pleased with the number of
stockholders who voted for the proposals presented at the  annual
meeting.  In particular, the approval of the sale of the  private
label  division represents an important step toward carrying  out
our  strategic  objectives  which we have  previously  announced,
namely  to  focus on our core asset, Joe's Jeansr and our  Joe'sr
branded   products.   After  obtaining  the   approval   of   our
stockholders,  we  were able to close this transaction  effective
May 12, 2006."



  Crossman  further  added,  "We  are  also  pleased  to  receive
approval of our slate of directors and the ratification of  Ernst
& Young as our independent registered public accounting firm.  We
believe  that  the  continuity  of  our  current  Board  and  its
composition will assist management in carrying out our  strategic
objectives."

About Innovo Group Inc.

Innovo  Group  Inc.,  through its operating  subsidiaries  Innovo
Azteca  Apparel,  Inc.  and Joe's Jeans, Inc.,  is  a  sales  and
marketing organization designing and selling apparel products  to
the  retail and premium markets.  The Company's apparel  products
consist  of  men's  and  women's denim and denim-related  apparel
products,  including,  high-end  denim  jeans  and  knit   shirts
featuring  Joe's(r)  and  Joe's Jeans(r)  branded  products. More
information   is   available  at  the   company   web   site   at
www.innovogroup.com.

Statements  in this news release which are not purely  historical
facts   are   forward-looking  statements,  including  statements
containing  the words "intend," "believe," "estimate,  "project,"
"expect"  or similar expressions.  Forward looking statements  in
this  press  release include, without limitation, our ability  to
achieve our strategic objectives of focusing on our Joe's  Jeansr
branded  products.   These statements are made  pursuant  to  the
safe  harbor provisions of Section 21E of the Securities Exchange
Act  of  1934,  as amended.  All forward-looking  statements  are
based upon information available to Innovo Group Inc. on the date
of   this  release.   Any  forward-looking  statement  inherently
involves risks and uncertainties that could cause actual  results
to differ materially from the forward-looking statements. Factors
that  would cause or contribute to such differences include,  but
are  not  limited to: uncertainty regarding the effect or outcome
of  the  Company's  decision to explore  strategic  alternatives;
continued   acceptance   of  the  Company's   products   in   the
marketplace, particularly acceptance and near-term sales  of  the
Company's brands such as Joe'sr; successful implementation of its
strategic plan; the extension or refinancing of its existing bank
facility  and the restrictions any such extension or  refinancing
could  place on the company; the ability to obtain new  financing
from  other  financing sources; the ability to generate  positive
cash  flow  from operations; competitive factors,  including  the
possibility  of  major  customers sourcing  product  overseas  in
competition   with  our  products;  dependence  upon  third-party
vendors;  a possible oversupply of denim in the marketplace;  and
other  risks  detailed in the Company's periodic  report  filings
with  the  Securities and Exchange Commission.  By  making  these
forward-looking statements, the Company undertakes no  obligation
to  update  these statements for revisions or changes  after  the
date  of this release.  Readers are cautioned not to place  undue
reliance on forward-looking statements.

Contact:
Innovo Group, Inc.
Shane Whalen
323-278-6764

Integrated Corporate Relations
Investors: Brendon Frey
Media: John Flanagan
203-682-8200