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October 17,
2008

Via Edgar Transmission

Securities
and Exchange Commission

Attn:
H. Christopher Owings

100
F Street, N.E.

Washington,
DC 20549

  Re:

  Form 10-K
  for Fiscal Year Ended January 5, 2008

  Filed
  March 5, 2008

  Forms
  10-Q for Fiscal Quarters Ended April 5 and July 5, 2008

  Filed
  May 15 and August 14, 2008

  Definitive
  Proxy Statement on Schedule 14A

  Filed
  April 10, 2008

  File
  No. 000-19848

Dear
Mr. Owings:

On
behalf of our client, Fossil, Inc. (the “Company”), we submit the following
responses to the letter dated September 25, 2008 containing comments from
the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to the Company’s Annual Report on Form 10-K for the fiscal year
ended January 5, 2008 (the “Form 10-K”), Quarterly Reports on Form 10-Q
for the fiscal quarters ended April 5, 2008 (the “First Quarter Form 10-Q”)
and July 5, 2008 (the “Second Quarter Form 10-Q” and,
together with the First Quarter Form 10-Q, the “Form 10-Qs”)
and Definitive Proxy Statement on Schedule 14A filed on April 10, 2008
(the “Proxy Statement” and, together with the Form 10-K and Form 10-Qs,
the “Filings”).  For your
convenience, we have restated the Staff’s comments below, together with the
Company’s response to each respective comment.
For your convenience, we are also sending to each of Robert W.
Errett, Attorney Advisor, and Ellie Bavaria, Special Counsel, a copy of this
letter.  Please be advised that the responses contained herein, and the
information provided herein, have been prepared by, and obtained from, the
Company.

The
Company hereby acknowledges that:

·                                          The
Company is responsible for the adequacy and accuracy of the disclosures in the
filings.

·                                          The Staff’s comments or changes to
disclosures in response to the Staff’s comments do not foreclose the Commission
from taking any action with respect to the filings.

·                                          The Company may not assert the Staff’s
comments as a defense in any proceedings initiated by the Commission or any
person under the federal securities laws of the United States.

Form 10-K
for the Fiscal Year Ended January 5, 2008

Cover
page:

1.              Please disclose that your securities are
registered under Section 12(b) of the Securities Exchange Act of 1934
because the shares of common stock are listed on the NASDAQ Global Select
Market.

Response:

The
requested disclosure will be added to the cover page of future Form 10-Ks.

2.              Please indicate on the cover page that
you have incorporated by reference into the Form 10-K disclosure from the
proxy statement.  Refer to Form 10-K.

Response:

The
requested disclosure will be added to the cover page of future Form 10-Ks.

Item 1
Business, page 3

Products,
page 8

Watch
Products, page 10

3.              Please broaden your discussion as to how
important the licenses you hold are to your business, and the duration and
effect of all licenses held.  Refer to
Item 101(c)(1)(iv) of Regulation S-K.

Response:

The
Company will include additional information regarding its material licenses in
future filings in accordance with this comment.
As an example of this disclosure, please see the following additions in
underscore and deletions in strikethrough to the disclosure that was set forth
in the Form 10-K regarding the importance of the licenses and the duration
of licenses held:

“Licensed brands.  We have entered into multi-year,
worldwide exclusive license agreements for the manufacture, distribution and
sale of watches bearing the brand names of certain globally recognized fashion
companies. The following table sets forth specific information with respect to
certain of our licensed watch products:

  Brand(s)

  Suggested

  Price Point

  Range

  Expiration

  Date

  Distribution Channels

  ADIDAS

  $35 - 165

  12/31/12

  Major department stores, major sports stores,
  specialty retailers, jewelry stores and adidas stores worldwide

  BURBERRY

  $295 - 1,000

  12/31/12

  Better department stores, specialty retailers, duty
  free stores worldwide and Burberry retail stores worldwide

  DIESEL

  $85 - 595

  12/31/10

  Better department stores, specialty retailers,
  Diesel retail stores worldwide and www.dieseltimeframes.com

  DKNY

  $95 - 250

  12/31/09

  Major department stores, jewelry stores, specialty
  retailers, and DKNY retail stores worldwide

  EMPORIO ARMANI

  $125 - 595

  12/31/08

  Major department stores, specialty retailers, major
  jewelry and watch stores, Emporio Armani boutiques worldwide, duty free
  stores worldwide and www.emporioarmani.com

  MARC BY MARC

  JACOBS

  $125 - 350

  12/31/10

  Better department stores, specialty retailers and
  Marc by Marc Jacobs boutiques worldwide

  MICHAEL Michael

  Kors

  $125 - 295

  12/31/14

  Better department stores, specialty retailers,
  jewelry stores, duty free stores worldwide and Michael Kors boutiques
  nationwide

The
continuation of our material license agreements is important to the growth of
our watch business, especially in Europe and Asia.  Our material license agreements have
various expiration dates between 2008 and 2013. The EMPORIO ARMANI license
agreements for watches and jewelry expire on December 31, 2008.  The DKNY watch license expires on December 31,
2009.  In
2007, sales of our licensed-brand watches listed in the above table accounted
for approximately thirty-one percent of our total net sales for all products.  We are currently in the later stages of
negotiating with the owners of the EMPORIO ARMANI brand for new licenses and
anticipate finalizing the licenses prior to the end of 2008. We have also
entered into a number of license agreements for the sale of collectible
watches. Under these agreements, we design and manufacture goods bearing the
trademarks, trade names and logos of various entities and market these goods
through our website and major department stores.”

Design
and Development, page 12

4.              You state that you have an internal creative
team to design your products and that you gather information from your
customers regarding retail performance of your products.  Please discuss the estimated amount you spent
during each of the last three fiscal years on company-sponsored research and
development activities determined in accordance with generally accepted
accounting principles.  In addition,
state, if material, the estimated dollar amount spent during each of the last
three fiscal years on customer-sponsored research activities relating to the
development of new products, services or techniques or the improvement of
existing products, services or techniques.
Refer to Item 101(c)(1)(xi) of Regulation S-K.

Response:

The
Company spent $979,308, $806,400 and $75,079, respectively for fiscal years
2005, 2006 and 2007 related to company-sponsored research and development
activities.  Further, the Company
currently estimates that it will spend approximately $729,000 on such
activities in fiscal year 2008.  As these
amounts represent less than 0.25% of total operating expenses in each of fiscal
years 2005, 2006 and 2007, the Company does not believe these amounts are
material.

The
Company had no expenditures related to customer-sponsored research activities
in the last three fiscal years.

Item
1A. Risk Factors, page 21

5.              In the final risk factor on page 23, you
indicate that you do not maintain long-term contracts with suppliers, but rely
upon close relationships with these suppliers.
Please describe in greater detail how a failure to maintain close
relationships with your current suppliers and to develop long-term
relationships with other suppliers will impact your business.

Response:

The
following language in underscore will be added to future filings that contain a
risk factor related to the Company’s supplier relationships:

“Access to suppliers that are not Fossil
subsidiaries is not guaranteed because we do not maintain long-term contracts
but instead rely on long-standing business relationships, which may not
continue in the future.

The
majority of our watch products are currently assembled to our specifications by
our majority owned entities in Asia and Switzerland with the remainder
assembled by unrelated entities.  Certain
of our other products are currently manufactured to our specifications by
independent manufacturers in international locations, including China, Hong
Kong, Italy, Korea, Mexico and Taiwan.  We have no long-term
contracts with these independent manufacturing sources and

compete
with other companies for production facilities.  All transactions
between us and our independent manufacturing sources are conducted on the basis
of purchase orders. Our future success will depend upon our ability to maintain
close relationships with our current suppliers and to develop long-term
relationships with other suppliers that satisfy our requirements for price,
quality and production flexibility.  Our ability to establish new manufacturing
relationships involves numerous uncertainties, including those relating to
payment terms, costs of manufacturing, adequacy of manufacturing capacity,
quality control and timeliness of delivery.
Any failure by us to maintain long-term relationships with our current
suppliers or to develop relationships with other suppliers could have a
material adverse effect on our ability to manufacture and distribute our
products.”

Item 3.
Legal Proceedings, page 33

6.              You state that you “believe that [you] have
meritorious defenses to these claims.”
This is a legal opinion that counsel should provide, or in the
alternative you should remove this statement.

Response:

The
statement that the Company believes it has meritorious defenses to the legal
claims will be removed from future filings.

7.              Please indicate the relief the plaintiffs
seek.  Refer to Item 103 of Regulation
S-K.

Response:

The
Company will add disclosure to future filings regarding the relief that the
plaintiffs seek.  As an example of this
disclosure, please see the following addition to the disclosure that was set
forth in the Legal Proceedings section of the Form 10-K:

“Plaintiffs
seek (i) money damages for all losses and damages suffered as a result of
the acts alleged in the compliant; (ii) for defendants to account for all
damages caused by them and all profits and special benefits obtained as a
result of the alleged unlawful conduct; (iii) actions to reform and
improve Company corporate governance and internal control procedures; (iv) the
ordering of the imposition of a constructive trust over the defendants’ stock
options and proceeds derived therefrom; and (v) punitive damages.”

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 39

Summary,
page 39

8.              Please expand this section to discuss known
material trends and uncertainties that will have, or are reasonably likely to
have, a material impact on your revenues or income or result in your liquidity
decreasing or increasing in any material way.
In doing so, provide additional information about the quality and
variability of your earnings and cash flows so that investors can ascertain the
likelihood of the extent past performance is indicative of future
performance.  In addition, please discuss
in reasonable detail:

·                  economic or industry-wide factors relevant to
your company, and

·                  material opportunities, challenges, and risks
in short and long term and the actions you are taking to address them.

For example, you should discuss fully any risks associated with your increasingly
international operations, the effects of foreign currency exchange rates and
the economic environment in the United States and internationally.  Refer to Item 303 of Regulation S-K and SEC
Release No. 33-8350.

Response:

The
Company will add disclosure in accordance with this comment to future
filings.  As an example of this
disclosure, please see the following additional disclosure to the Summary
section of Item 7. Management’s Discussion of Financial Condition and Results
of Operations that was set forth in the Form 10-K:

“Our
business is subject to global economic cycles and retail industry
conditions.  Purchases of discretionary fashion accessories, such as
our watches, handbags, sunglasses and other products, tend to decline during
recessionary periods when disposable income is low and consumers are hesitant
to use available credit.  Future sales
and earnings growth is contingent upon our ability to anticipate and respond to
changing fashion trends and consumer preferences in a timely manner while
continuing to develop innovative products in the respective markets in which we
compete.  As is typical with new
products, market acceptance of new designs and products we may introduce is
subject to uncertainty.  In addition, we generally make decisions
regarding product designs several months in advance of the time when consumer
acceptance can be measured.

Our
international operations are subject to many risks, including foreign
currency.  Generally, a strengthening of
the U.S. dollar against currencies of other countries in which we operate will
reduce the translated amounts of sales and operating expenses of our
subsidiaries, which results in a reduction of our consolidated operating
income.”

Liquidity
and Capital Resources, page 51

9.              Your
discussion regarding your liquidity and capital resources appears focused
solely on a short-term basis.  Please
enhance your discussion on liquidity and capital resources to discuss liquidity
and capital resources on both a long-term and short-term basis.  Refer to Instruction 5 of Item 303(a) of
Regulation S-K.

Response:

In
future filings, the Company will expand the disclosure to include a discussion
of the adequacy of the Company’s current cash position, cash flow from
operations and availability under the Company’s credit facility to finance
working capital needs and planned capital expenditures for the next twelve
months.

Quantitative
and Qualitative Disclosure about Market Risk, page 54

10.       To the extent material, please
expand your discussion to briefly discuss the variety of financing and
operating practices you employ to manage the market risk you face from
settlement of inter-company inventory transactions.  Please include a discussion of the objectives,
general strategies, and instruments, if any, used to manage those
exposures.  Refer to Item 305(b)(ii) of
Regulation S-K.

Response:

In
future filings, the Company will expand disclosure in this section to include
the variety of operating practices the Company employs to manage the market
risk it faces relative to foreign currency exchange rate changes.  These operating practices include, among
others, the Company’s ability to convert foreign currency into U.S. dollars at
spot rates and to maintain U.S. dollar pricing relative to sales of the Company’s
products to certain distributors located outside the U.S.

Item
9A. Controls and Procedures, page 81

Changes
in Internal Control over Financial Reporting, page 82

11.       We note that your discussion does
not include the statement required pursuant to Item 308(a)(4), which requires
you to state that a registered public accounting firm has audited the financial
statements included in the annual report containing the disclosure required by
Item 308 and has issued an attestation report on the registrant’s internal
control over financial reporting.  Please
provide the statement as required under Item 308(a)(4) of Regulation S-K.

Response:

In
future Form 10-Ks, the Company will add the following disclosure under the
heading “Management’s Report on Internal Control over Financial Reporting” in
Item 9A. Con