<PAGE>   1
                                                                 EXHIBIT 10.1(c)

              AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT

         This Amendment Number Two to Loan and Security Agreement ("Amendment")
is entered into as of August 30, 1999, among SAMUELS JEWELERS, INC., a Delaware
corporation (the "Borrower"), on the one hand, and the financial institutions
listed on the signature pages hereof (such financial institutions, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), and FOOTHILL
CAPITAL CORPORATION, as Agent ("Agent"), on the other hand.

                                    RECITALS

         A. Borrower, Lenders and Agent have previously entered into that
certain Loan and Security Agreement, dated as of October 2, 1998 and amended by
that certain Amendment Number One, dated as of April 15, 1999 (the "Agreement").

         B. Borrower, Lenders and Agent desire to further amend the Agreement as
provided for and on the conditions herein.

         NOW, THEREFORE, Borrower, Lenders and Agent hereby amend certain
provisions of the Agreement as follows:

         1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.

         2. AMENDMENTS.

            2.1 Section 1.1 of the Agreement is hereby amended by deleting the
following definitions therefrom: "Credit Sales Reserve," "Dilution Reserve,"
"Eligible Accounts," and "Reduction Option."

            2.2 Section 1.1 of the Agreement is hereby amended by adding the
following new definitions thereto:

                "Credit Card Issuer" means World Financial Network National
         Bank.

                "Credit Card Agreement" means that certain Private Label Credit
         Card Program Agreement, between Credit Card Issuer and Borrower.

                "Holdings" means Samuels Holdings, a California corporation, and
         a wholly owned subsidiary of Borrower.



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                "Permitted Accounts Sale Agreement" means that certain
         Purchase and Sale Agreement, dated as of July 27, 1999 between Borrower
         and Credit Card Issuer.

                "Permitted Accounts Sale Proceeds" means the monies due to
         Borrower as a result of the sale of the Private Label Accounts pursuant
         to the Permitted Accounts Sale Agreement.

                "Permitted Stock Repurchase Transactions" means any of one or
         more transactions in which Borrower repurchases its common stock in the
         open market, so long as (a) at such time no Event of Default has
         occurred and is continuing or would arise as a result of such
         repurchase, (b) such purchase is not from an Affiliate, (c) the
         purchase price for any such transaction does not exceed $7 per share,
         and (d) after each such repurchase is taken into account Borrower's
         Availability would be at least $5,000,000.

                "Private Label Accounts" means those certain Accounts existing
         as of August 30, 1999 and arising out of Borrower's sales of Inventory
         to customers pursuant to Borrower's existing private label credit card
         arrangements, together with those of Borrower's Books and any General
         Intangibles related to such Accounts all as more completely described
         on Schedule P-2. The Private Label Accounts are to be sold to Credit
         Card Issuer pursuant to the Permitted Accounts Sale Agreement

                "Samuels.com" means Samuels.com, Inc., a Delaware corporation,
         and a wholly owned subsidiary of Borrower.

            2.3 Section 1.1 of the Agreement is hereby amended by amending each
of the following existing definitions to read as hereinafter set forth:

                (a) "Maximum Amount" means $40,000,000.

                (b) "Permitted Accounts Sale" means Borrower's sale of its
         Private Label Accounts to the Credit Card Issuer from time to time on
         the terms set forth in the Permitted Accounts Sale Agreement.

                (c) "Seasonal Period" means, with respect to Advances against
         Inventory under Section 2.1 (a)(y). the period from and including
         October 1 in any year through and including December 15 in that year.

            2.4 Section 2.1 (a) of the Agreement is hereby amended by deleting
paragraph (x) therefrom in its entirety.

            2.5 Section 2.1 (b) of the Agreement is hereby amended to read as
follows:


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                (b) Anything to the contrary in Section 2.1(a) above
         notwithstanding, Agent may create reserves against the Borrowing Base
         or reduce its advance rates based upon Eligible Inventory without
         declaring an Event of Default if it determines that there has occurred
         a Material Adverse Change.

            2.6 Section 2.1(n) of the Agreement is hereby amended and restated
in its entirety to read:

                           "[Intentionally Deleted]"

            2.7 Section 5.2 of the Agreement is hereby amended and restated in
its entirety to read:

                           "[Intentionally Deleted]"

            2.8 Section 7.3 of the Agreement is hereby amended by adding the
following to the end thereof:

         ;provided, however, that Borrower shall be entitled to make the
         Permitted Accounts Sale to the Credit Card Issuer pursuant to the
         terms of the Permitted Accounts Sale Agreement.

            2.9 Clause (viii) of Section 7.13 of the Agreement is hereby amended
to read as follows:

                (viii) Borrower may hold not less than 100% of the equity
         interests in Holdings and Samuels.com and may hold the Tax Loan Notes.

            2.10 a new clause (x) is hereby added to Section 7.13 of the
Agreement as follows:

                (x) Borrower may acquire its own shares in one or more Permitted
         Stock Repurchase Transactions; provided, however, that the aggregate
         amount Borrower may spend for all such transactions may not exceed
         $1,000,000;

            2.11 Section 7.14(c) of the Agreement is hereby deleted and
replaced with the following:

                (c) advances or any loans to any Affiliate of Borrower permitted
         by clause (viii) of Section 7.13;

            2.12 Section 7.20(a) of the Agreement is hereby amended and
restated in its entirety to read:

                           "[Intentionally Deleted]"

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            2.13 Section 7.20 (b) of the Agreement is hereby amended to read as
follows:

                (b) Tangible Net Worth. A Tangible Net Worth of at least the
         following amounts as of the last day of the fiscal quarters of Borrower
         ending on or about the last day of the following months:

<TABLE>
<CAPTION>

   Month                              Minimum Tangible Net Worth
   -----                              --------------------------

<S>                                           <C>
  August 1999                                 $24,000,000
  November 1999                               $20,000,000
  February 2000                               $28,000,000
  May 2000                                    $27,000,000
  August 2000                                 $24,000.000
  November 2000                               $21,000,000
  February 2001                               $29,000,000
  May 2001                                    $28,000,000
  August 2001                                 $25,000,000
</TABLE>

            2.14 Section 7.22 of the Agreement is hereby amended and restated in
its entirety to read:

                                            "[Intentionally Deleted]"

            2.15  Schedule C-1 of the  Agreement is hereby amended and restated
in its entirety to read as set forth on Schedule C-1 to this Amendment to
reflect the allocated Commitments of the Lenders as of the effective date of
this Amendment; and a new Schedule P-2 is hereby added to the Agreement, to read
as set forth on Schedule P-2 to this Amendment.

         3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lenders
and Agent that all of Borrower's representations and warranties set forth in the
Agreement are true, complete and accurate in all respects as of the date hereof
(except to the extent such representations and warranties relate solely to an
earlier date).

         4. DEFAULTS: WAIVER. Borrower hereby affirms to Lenders and Agent that.
subject to the waiver provided in the preceding sentence, no Default or Event of
Default exists as of the date hereof.

         5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon the following:

            (a) Receipt by Agent of fully executed copies of this Amendment;

            (b) Receipt by Agent of fully executed copies of an Irrevocable
Assignment by Borrower in form and substance acceptable to Agent, specifying
payment of the

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Permitted Accounts Sale Proceeds directly to the Agent's Account, and payment of
any future monies owing by Credit Card Issuer directly to the Lockboxes;

            (c) Payment of a fee to Agent, for the pro rata account of Lenders,
in the amount of $30,000.

         6. COSTS AND EXPENSES. Borrower shall pay to Agent all of Agent's
out-of-pocket costs and expenses (including, without limitation, the reasonable
fees and expenses of its counsel, which counsel may include any local counsel
reasonably deemed necessary, search fees, filing and recording fees,
documentation fees, appraisal fees, travel expenses, and other fees) arising in
connection with the preparation, execution, and delivery of this Amendment and
any related documents

         7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended, modified, and supplemented hereby, shall remain in full
force and effect.

         8. COUNTERPARTS EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts,

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taken together, shall constitute but one and the same Amendment. This Amendment
shall become effective upon the execution of a counterpart of this Amendment by
each of the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.

                                        SAMUELS JEWELERS, INC.,
                                        a Delaware corporation

                                        By  /s/ E. PETER HEALEY
                                           -------------------------------------
                                        Title: E. Peter Healey
                                              ----------------------------------
                                               Executive Vice President and CFO
                                              ----------------------------------

                                        FOOTHILL CAPITAL CORPORATION,
                                        a California corporation, as Agent and
                                        as a Lender

                                        By /s/ ROBERT CASTINE
                                           -------------------------------------
                                        Title: Vice President
                                              ----------------------------------
                                        LASALLE BUSINESS CREDIT, INC.,
                                        a Delaware corporation

                                        By /s/ HERBERT KIDD
                                           -------------------------------------
                                        Title: S.V.P.
                                              ----------------------------------

                                        SUNROCK CAPITAL CORP.,
                                        a Delaware corporation

                                        By /s/ JOHN IRWIN
                                           -------------------------------------
                                        Title: S.V.P.
                                              ----------------------------------

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                                  SCHEDULE C-1

                      COMMITMENTS AS OF EFFECTIVE DATE OF
                       AMENDMENT NO. 2 TO THIS AGREEMENT

<TABLE>
<CAPTION>

Lender                                               Commitment
------                                               ----------

<S>                                                  <C>
Foothill Capital Corporation                         $16,000,000
LaSalle Business Credit, Inc.                        $16,000,000
Sunrock Capital Corp.                                $ 8,000,000
</TABLE>




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                                                                    SCHEDULE P-2

                             Private Label Accounts

         All capitalized terms not separately defined herein are used herein as
defined in the Purchase and Sale Agreement, dated July 27, 1999 between Borrower
and World Financial Network National Bank (the "Agreement").

         Private Label Accounts means:

               (i)  all of the Accounts and the Receivables (excluding all
                    Ineligible Accounts) as of the Cut-Off Time;

               (ii) all Account Documentation;

               (iii) all Books and Records;

               (iv) all pending Credit Card applications and Borrower's rights
                    with respect to applications for new Accounts; and

               (v)  the Cardholder List;

         The following terms are defined in the Agreement as follows:

         "Account" shall mean (i) a Credit Card accessed open-end consumer
credit account established by Borrower, (ii) the numbers associated with such
accounts, and (iii) any and all rights, remedies, benefits, interests and
titles, both legal and equitable, to which Borrower may be entitled with respect
to any of the foregoing. "Account" shall exclude any Ineligible Accounts.

         "Account Documentation" shall mean, with respect to an Account, any
and all documentation from time to time relating to such Account, including,
without limitation, Cardholder Agreements, applications and all legally required
forms, notices and disclosures relating to such applications and Accounts,
historical statements and microfilm records thereof, paper and systemic records
of customer service and collection notes and letters, all computer master file
records and any records of whatever form or nature related to any of the
foregoing, all Transaction Records and all tangible and intangible information,
arising from any of the foregoing or pertaining thereto.

         "Books and Records" shall mean all books, records, files, credit or
collection information, periodic statement applications, business records,
reports, correspondence, and other financial and computer data owned by Borrower
for use in connection with, or relating to, the Credit Card Business or the
Private Label Accounts whether in documentary form or on microfilm, microfiche,
magnetic tape, computer disk or other form and whether maintained by Borrower or
an agent or servicer of Borrower.

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         "Cardholder" shall mean an individual (i) to whom a Credit Card has
been issued pursuant to a Cardholder Agreement, (ii) in whose name an Account,
in connection with which the Credit Card may be used, is established, or (iii)
who is or may become an obligor on the Account.

         "Cardholder Agreement" shall mean an agreement between Borrower, on the
one hand, and a Cardholder, on the other hand, under which Credit Cards are
issued, containing the terms and conditions applicable to an Account as such
agreement may be amended, modified and supplemented from time to time.

         "Credit Card" shall mean the plastic card or temporary card with the
name "Jewelcard" on it which card is owned by Borrower in respect of an Account
and evidences a Cardholder's right to purchase goods and services on credit.

         "Credit Card Business" shall mean, collectively, all the Accounts and
Receivables and all of the elements of Borrower's business of operating the
open-ended credit card revolving retail credit plan.

           "Receivables" shall mean any and all amounts owing by Cardholders on
Accounts, including, without limitation, amounts owed due to outstanding
extensions of credit, interest and finance charges (whether billed or accrued)
and fees for returned checks, late payments or otherwise.

         Notwithstanding the foregoing, to the extent that any of the Private
Label Accounts are repurchased by or reacquired by Borrower (whether pursuant to
the Agreement or otherwise), such assets shall be Collateral subject to the
security interest of Agent.