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                                 April 23, 1997


Mr. Neal Gottfried
4 Carina
Irvine, CA 92612

Dear Neal:

We are very pleased to offer you the position of Senior Vice President of Store
Operations and Visual Merchandising for Gantos, Inc. (the "Company").  We are
very excited to invite you to join our senior management team.  The terms of our
offer supersede any of our prior discussions and agreements, and are as follows:

1.   Your initial annual salary will be $225,000.

2.   Your date of employment will begin on April 14, 1997 ("Start Date").

3.   You will be eligible to participate in the Gantos, Inc. Executive Bonus
Plan, beginning with the 1997 plan.  A copy of the 1996 plan is enclosed.  As
reflected in the enclosed 1996 plan, your 1997 bonus will be based on the
Company's profitability and prorated based on the 1997 Gantos base salary
actually paid to you.

4.   On the Start Date, you will be granted an option to purchase 25,000 shares
of Gantos, Inc. common shares at an exercise price equal to the fair market
value of Gantos, Inc. common shares on the Start Date.  The option will vest in
one-fifth (1/5) cumulative annual installments, beginning on the first
anniversary of the Start Date.  Thereafter, you will be eligible for annual
stock option grants in amounts commensurate with your position with the Company
as may be granted at the discretion of the Board of Directors or its
Compensation Committee.

5.   You will receive twelve (12) months separation pay as your exclusive
severance benefits in the event that your employment is terminated without cause
(and other than pursuant to your death or disability) within the first twenty-
four (24) months of your employment.  As a condition of your receipt of
severance pursuant to this agreement, after any termination you must (a) use
your best efforts to seek and obtain new employment (b) advise the Company, on a
timely and regular basis, of the status of your efforts, of the terms of any
employment (including self-employment), and of any remuneration you receive from
such employment.  If at any time the Company, in good faith, determines that you
are not so seeking such employment, your right to receive severance benefits
will be immediately terminated.  The severance benefits to which you would
otherwise be entitled will be reduced by the remuneration that is paid or
payable to you (whether as salary, bonus, commissions, consulting fees,
compensation and dividends from any entity owned by you or a sole proprietorship
established by you or otherwise) from rendering any services to any person,
corporation or entity during the period that you are eligible to receive
severance benefits under this agreement.  Payment on account of death or
disability or for termination without cause after the first twenty-four (24)
months of employment will be in accordance with the Company policies concerning
these areas.  You will be entitled to no severance benefits if you terminate
your employment with the Company.

6.   To assist you in relocating, the Company will pay or reimburse you for the
reasonable expenses of:

     A.   A third party relocation service engaged by the Company to purchase
     your residence in Irvine, California.  This service will appraise your
     residence and give you a written offer to purchase it for a specified
     price, net of closing costs.  You would have 90 days to accept the
     relocation services offer; if you do not timely accept the offer, you will
     be responsible for the sale of your residence.  In the event the amount
     received from the sale of your residence is less than the original amount
     you paid, the Company will pay you the difference, but not to exceed
     $25,000.

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Mr. Neal Gottfried
April 23, 1997
Page two


     B.   Loan origination fees and discount points of up to two percent of the
     principal amount of your mortgage, other reasonable and customary closing
     costs in conjunction with your new home purchase in the Stamford area, and
     reasonable and customary closing costs for the sale of your current home.

     C.   Movement of all household goods and vehicles from Irvine to the
     Stamford area and storage of household goods for a period of ninety days.

     D.   Interim living expenses for you for temporary living quarters (at a
     mutually acceptable place) in the Stamford area and a rental car for a
     period of ninety days after your Start Date while you secure housing in the
     Stamford area.

     E.   To the extent not deductible by you, pay you an additional amount as
     compensation to cover taxes owing on the amounts paid to you for all
     relocation related expenses for tax purposes (i.e. gross up).

7.   You will receive such benefits as the Company provides its other Senior
Vice Presidents.  Currently the Company provides (i) a non-contributory group
life insurance policy in the amount of one times your annual base compensation,
(ii) an individual disability policy which provides benefits up to 60% of your
salary, (iii) a 30% discount on all merchandise purchases at our regular price
stores, (iv) medical prescription coverage under our plan on the first day of
the month following two months of employment, (v) on the first day of the month
after two months of employment, dental coverage under our plan, (vi) four weeks
vacation a year, (vii) after 870 hours of employment are met, eligibility to
participate in the Company's 401(k) Plan, and (viii) after six (6) months of
continuous employment, eligibility to participate in the Employee Stock Purchase
Plan.  During the health benefits waiting periods, the Company will reimburse
you for the cost of continuing these coverages under COBRA with your former
employer.  Enclosed is a complete breakdown of our benefit plans for your
information and review.  You will also receive a car allowance of $600 per
month.

8.   Your employment will be at will and may be terminated by either of us, with
or without cause, reason or notice.  Upon such a termination, as your exclusive
severance benefits, you will be entitled to your salary through the termination
date and amounts, if any, payable to you or your estate as described in
paragraph 5 above.

9.   You will comply with and be bound by all Company policies, procedures and
guidelines, as they may be amended and supplemented from time to time during
your employment with the Company.

Please date, sign and return the enclosed copy of this letter to indicate your
acceptance of employment on these terms.

If I can be of assistance in answering any questions that you may have, please
don't hesitate to contact my office.

                              Very truly yours,

                              GANTOS, INC.




                              Arlene H. Stern
                              President


Accepted and agreed on April _____, 1997.



-----------------------------------
Neal Gottfried