EXHIBIT 10.12

AMENDMENT LETTER NO. 2

                                                                                                                    Dated
as of January 24, 2003

To the Class A Conduit Purchasers,

the Class A Committed Purchasers,

the Managing Agents, the Program Agent

and the Trustee

Ladies and Gentlemen:

We refer to the Series 2001-1-VFC Supplement dated as of August 24, 2001 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Supplement"; the terms defined therein, unless otherwise defined
herein, being used herein as therein defined) among Stage Receivable Funding LP,
as the Transferor, Specialty Retailers (TX) LP, as the Servicer, and Deutsche
Bank Trust Company Americas (formerly known as Bankers Trust Company), as the
Trustee.

It is hereby agreed by you and us that, effective as of the date of this
amendment letter (this "Amendment"), the Supplement is hereby amended as
follows:

(a) Section 10(r)(i) is amended by deleting the figure "$25,000,000" set forth
opposite the reference to Fiscal Year 2003 in the table thereof and replacing it
with the figure "$45,000,000".

(b) Section 10(r) is amended by deleting the words "determining compliance with
the Fixed Charge Coverage Ratio" from the fourth line thereof and substituting
the words "determining compliance with the Leverage Ratio" therefor.

(c) Section 10(r)(iv) is amended by inserting the following parenthetical
immediately after the phrase "Consolidated total liabilities" in the first
sentence thereof:

(plus any non-cash charges incurred by the Transferor solely as a result of
compliance with any accounting requirement of the Financial Accounting Standards
Board that Debt under the Securitization Program be reflected on its financial
statements less any non-cash gains realized by the Transferor solely as a result
of compliance with any accounting requirement of the Financial Accounting
Standards Board that Debt under the Securitization Program be reflected on its
financial statements, in each case net of any taxes).

(d) The paragraph beginning with the phrase "then, following any applicable
grace period" shall be moved from the end of Section 10(r) to the end of Section
10(t).

(e) The definition of "EBITDA" contained in Annex A to the Supplement is deleted
in its entirety and the following substituted therefor:

"EBITDA" means, at any date for the determination thereof, the sum, determined
on a Consolidated basis for the last twelve-month period, of (a) net income (or
net loss), (b) interest expense (including interest expense associated with the
Securitization Program), (c) income tax expense, (d) depreciation expense, (e)
amortization expense, (f) non-recurring, transactional or unusual losses
deducted in calculating net income less non-recurring, transactional or unusual
gains added in calculating net income, (g) any non-cash expenses, non-cash
losses or other non-cash charges resulting from the writedown in the valuation
of any assets in each case of the Parent Guarantor and its Subsidiaries,
determined in accordance with GAAP for such period, (h) any non-cash charges
associated with any stock compensation plans and (i) any non-cash charges
incurred by the Borrower solely as a result of compliance with any accounting
requirement of the Financial Accounting Standards Board that Debt under the
Securitization Program be reflected on its financial statements less any
non-cash gains realized by the Borrower solely as a result of compliance with
any accounting requirement of the Financial Accounting Standards Board that Debt
under the Securitization Program be reflected on its financial statements.

This Amendment shall become effective as of the date first above written when,
and only when (x) the Program Agent shall have received (i) counterparts of this
Amendment executed by the Transferor, the Servicer, the Trustee, Corporate
Receivables Corporation and Blue Keel Funding Corporation, as the sole Class A
Conduit Purchasers, Citibank, N.A. and Fleet National Bank, as the sole Class A
Committed Purchasers, Citicorp North America, Inc. and Fleet Securities, Inc.,
as the sole Managing Agents and Citicorp North America, Inc., as the Program
Agent, (ii) the consent and agreement attached hereto executed by the Parent and
(iii) an executed copy of that certain Letter Amendment No. 7 relating to the
Credit Agreement dated as of August 24, 2001 among Specialty Retailers (TX) LP,
Stage Stores, Inc., the Lender Parties party thereto, Citicorp USA, Inc., as
Administrative Agent and Collateral Agent and Salomon Smith Barney Inc., as
Arranger and Book Manager and (y) the Transferor shall have paid to the Program
Agent all fees, costs and expenses of the Program Agent in connection with the
preparation, execution, delivery and administration of this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Program Agent).

The execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Trustee, any Class A Conduit Purchaser, any Class A Committed Purchaser, any
Managing Agent or the Program Agent under the Supplement or any related
instrument or agreement, nor constitute a waiver of any provision of the
Supplement or any related instrument or agreement.

This Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

By its execution below, the Transferor confirms that it is the sole Holder of
the Exchangeable Transferor Certificate. By their execution below, Citicorp
North America, Inc. and Fleet Securities, Inc., as the sole Managing Agents,
confirm that (a) their consent (as evidenced by such execution below) to the
terms of this Amendment constitutes satisfaction of the Rating Agency Condition
for purposes of Series 2001-1-VFC and (b) they are the sole Holders of Series
2001-1-VFC Certificates for the sole benefit of (i) in the case of the Series
2001-1-VFC Certificate held by Citicorp North America, Inc., Corporate
Receivables Corporation and Citibank, N.A., and (ii) in the case of the Series
2001-1-VFC Certificate held by Fleet Securities, Inc., Blue Keel Funding, LLC,
and Fleet National Bank.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

If you agree to the terms and provisions hereof, please evidence such agreement
by executing and returning a counterpart of the attached agreement to this
Amendment.

                                                                    Very truly
yours,

                                                                               
STAGE RECEIVABLE FUNDING LP,

                                                                               
as Transferor

By Stage Receivable Mgmt LLC,

its general partner

By: /s/ Richard E. Stasyszen

Name: Richard E. Stasyszen

Title: Manager

SPECIALTY RETAILERS (TX) LP,

as Servicer

By SRI General Partner LLC,

its general partner

By: /s/ Richard E. Stasyszen

Name: Richard E. Stasyszen

Title: Manager

Acknowledged and Agreed:

                         DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as
Bankers Trust Company), not in its individual capacity but solely as the Trustee
for Stage Stores Master Trust                                

                                                            By: /s/ Louis Bodi

                                                            Name: Louis Bodi

                                                            Title: Vice
President

                                                            CORPORATE
RECEIVABLES CORPORATION,

as a Class A Conduit Purchaser

By: CITICORP NORTH AMERICA, INC.,

                    as Attorney-in-Fact

                    By: /s/ David J. Donofrio

                    Name: David J. Donofrio

                    Title: Vice President

                    CITICORP NORTH AMERICA, INC.,

                    as Program Agent and as a Managing Agent

                    By: /s/ David J. Donofrio

Name: David J. Donofrio

Title: Vice President

CITIBANK, N.A., as a Committed Purchaser

By: /s/ David J. Donofrio

Name: David J. Donofrio

Title: Attorney-in-Fact

BLUE KEEL FUNDING, LLC,

as a Class A Conduit Purchaser

By: /s/ Andrew M. Yearde

Name: Andrew M. Yearde

Title: Vice President

FLEET SECURITIES, INC.,

as a Managing Agent

By: /s/ Amy L. Baribeault

Name: Amy L. Baribeault

Title: Managing Director

FLEET NATIONAL BANK,

as Committed Purchaser

By: /s/ Daniel Platt

Name: Daniel Platt

Title: Assistant Vice President

CONSENT AND AGREEMENT

Dated as of January 24, 2003

The undersigned, as the Parent under and as defined in the Parent Undertaking
Agreement dated as of August 24, 2001 (the "Parent Undertaking"), in favor of
the Trustee (as such term is defined in the Supplement), hereby consents and
agrees to the foregoing Amendment Letter No. 2 (the "Amendment") and also agrees
that notwithstanding the effectiveness of such Amendment, the Parent Undertaking
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects, except that, on and after the effectiveness of
such Amendment, each direct or indirect reference in the Parent Undertaking to
the Supplement, shall mean and be a reference to the Supplement as modified by
such Amendment.

                                                                                   
STAGE STORES, INC.

                                                                                   
/s/ Richard E. Stasyszen

                                                                                   
By: Richard E. Stasyszen

                                                                                   
Title: SVP, Finance And Controller