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                                                      EXHIBIT 4.26

                            WAIVER AGREEMENT

              WAIVER AGREEMENT dated as of February 27, 1997, between JBI, INC.,
     a  Massachusetts   corporation  (the   "Borrower");   J.  BAKER,   INC.,  a
     Massachusetts  corporation ("Baker"), each of the banks that is a signatory
     hereto (individually a "Bank" and,  collectively,  the "Banks");  and FLEET
     NATIONAL BANK, a national banking association, as agent for the Banks party
     to the Credit Agreement referred to below (in such capacity,  together with
     its successors in such capacity, the "Agent").

              Reference is made to the Revolving Credit and Loan Agreement dated
     as of February 1, 1993 (as  modified  and  supplemented  and in effect from
     time to time, the "Credit Agreement") among the Borrower,  Baker, the Banks
     and the Agent. Baker has advised the Banks that Baker desires to:

              (a) sell its  divisional  business  known as Shoe  Corporation  of
     America  ("SCOA") to SC Acquisition  Corp.  (the "SCOA Sale"),  all as more
     particularly  described  in the draft Asset  Purchase  Agreement  among the
     Borrower and SC Acquisition Corp. (a copy of which has been provided to the
     Agent and each of the Banks; the "SCOA Sale Agreement");

              (b)  sell  its  divisional  business  known  as  Parade  of  Shoes
     ("Parade") to Payless  ShoeSource,  Inc. (the "Parade  Sale"),  all as more
     particularly  described  in the Purchase  and Sale  Agreement,  dated as of
     January 13,  1997 (a copy of which has been  provided to the Agent and each
     of the Banks; the "Parade Sale Agreement"); and

              (c)  amend its  Senior  Subordinated  Note  Agreement  (the  "Note
     Agreement"),  dated as of May 1,  1989  between  the  Borrower,  Baker  and
     Massachusetts  Mutual Life Insurance Company and Mass Mutual  Participation
     Investors  ("MassMutual"),  under  which  MassMutual  holds an  outstanding
     principal amount of $4,500,000 of the Borrower's Senior  Subordinated Notes
     (the  "Subordinated  Notes")  all as  more  particularly  described  in the
     consent  letter dated  February 24, 1997,  issued by the Borrower and Baker
     and accepted by  MassMutual (a copy of which has been provided to the Agent
     and each of the Banks; the "MassMutual Consent Letter").

              Baker has  further  advised the Banks that as a result of the SCOA
     Sale and the Parade Sale, and the  repositioning  of its licensed  discount
     shoe division, Baker will suffer a one-time, after-tax restructuring charge
     to earnings of  $118,000,000  to be recorded by Baker in the fourth quarter
     of  fiscal  year  ending  on  the  last   Saturday  in  January  1997  (the
     "Restructuring Charge").

              To that end, Baker and the Borrower have requested that:

              (i)  the Majority Banks waive certain provisions of the Credit 
                   Agreement solely


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     to the extent required to permit the SCOA Sale and the Parade Sale;

              (ii) the  Majority  Banks  consent  to the  Borrower  and  Baker's
     exclusion  of  the  Restructuring  Charge  in  their  calculations  of  all
     financial  covenants  contained  in the  Credit  Agreement  under  Sections
     10.01.1 through 10.01.10;

              (iii) the Majority  Banks waive  compliance  with Section 10.06 to
     the extent  necessary to (a) increase the applicable  interest rate payable
     under the Note Agreement and (b) amend the interest  payment  periods under
     the Note  Agreement,  each as  contemplated  under the  MassMutual  Consent
     Letter;

              (iv) the Majority  Banks  consent to the  Subsidiaries  delivering
     guarantees  to  MassMutual   in  connection   with  Baker  and   Borrower's
     obligations under the Note Agreement; and

              (v) in  connection  with the SCOA  Sale,  the  Agent  release  the
     Mortgage,  Assignment of Leases and Rents and Security Agreement,  dated as
     of June 21, 1996, from the Borrower to the Agent (the  "Mortgage")  held on
     the  property  located at 2035 Innis Road,  Columbus,  Ohio (the  "Columbus
     Property").

              Accordingly the parties hereto agree as follows:

              1.     Definitions. Except as otherwise defined in this Agreement,
     terms defined in the Credit Agreement are used herein as defined therein.

              2.      Waivers.  Effective as of the Effective Date (as defined
     in Section 5 hereof) and subject to the terms and conditions hereof, and 
     in reliance on the representations and warranties set forth herein, the 
     Majority Banks hereby:

              (a) waive compliance by the Borrower and Baker with the provisions
     of Sections  10.01.8 and 10.07 of the Credit Agreement solely to the extent
     required to permit the consummation of the SCOA Sale in accordance with the
     terms of the SCOA Sale  Agreement and to permit the release of the Mortgage
     in connection  with the SCOA Sale;  provided  that the foregoing  waiver of
     compliance  with  Sections  10.01.8 and 10.07  contained in this clause (a)
     shall only be effective if the SCOA Sale is  consummated on or before March
     17,  1997 and Baker shall have  complied  with the  covenants  set forth in
     clause (a) of  Section 4 hereof  and no  Default or Event of Default  shall
     have occurred and be continuing;

              (b) waive compliance by the Borrower and Baker with the provisions
     of Sections, 10.01.8 and 10.07 of the Credit Agreement solely to the extent
     required to permit the  consummation  of the Parade Sale in accordance with
     the terms of the Parade Sale Agreement;  provided that the foregoing waiver
     of compliance with Sections  10.01.8 and 10.07 contained in this clause (b)
     shall only be  effective  if the Parade Sale occurs on or before  March 17,
     1997,  and Baker shall have complied with the covenants set forth in clause
     (b) of Section 4 hereof and no Default or Event


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     of Default shall have occurred and be continuing; and

              (c) consent to Borrower and Baker's exclusion of the Restructuring
     Charge in their  calculations of all financial  covenants  contained in the
     Credit Agreement under Sections 10.01.1 through 10.01.10; provided that the
     foregoing  consent  contained in this clause (c) shall only be effective if
     the SCOA Sale is  consummated  on or before  March 17, 1997 and Baker shall
     have  complied  with the  covenants  set forth in clause  (a) of  Section 4
     hereof  and no  Default or Event of  Default  shall  have  occurred  and be
     continuing;

              (d) waive compliance by the Borrower and Baker with the provisions
     of Section 10.06 of the Credit  Agreement  solely to the extent required to
     permit the transactions  contemplated by the MassMutual Consent Letter upon
     the terms and  conditions and under the  circumstances  described in clause
     (c)  of  the  recitals  hereto;  provided  that  the  foregoing  waiver  of
     compliance  with Section 10.06 shall only be effective if (i) the SCOA Sale
     has  closed  and the Net  Proceeds  of the SCOA  Sale have been paid to the
     Banks,  (ii)  Borrower  and Baker have  permanently  reduced the  Aggregate
     Commitment Amount in an amount equal to the greater of (x) the Net Proceeds
     of the SCOA  Sale and (y)  $40,000,000,  and (iii) no  Default  or Event of
     Default  shall have  occurred  and be  continuing  prior to or after giving
     effect to any proposed transaction under the MassMutual Consent Letter.

              3.  Representations and Warranties.  By its signature hereto, each
     of the  Borrower  and Baker  represents  and  warrants to the Banks and the
     Agent that, as of the date hereof and after giving effect to the SCOA Sale,
     the  Parade  Sale  and  the  MassMutual  Consent  Letter  and  the  waivers
     contemplated by Section 2 hereof:

                      (a)      no Default has occurred and is continuing;

                      (b)  the  representations  and  warranties  set  forth  in
              Article VIII of the Credit  Agreement are true and complete on the
              date hereof as if made on and as of the date hereof and as if each
              reference  in said  Article  VIII  to  "this  Agreement"  included
              reference to this Agreement  (provided that the representation and
              warranty  set forth  herein  shall not be deemed to be  inaccurate
              solely by reason of the failure of any  information  contained  in
              any of Exhibits G (solely as the  information  therein  relates to
              Section 8.04 or 8.05 of the Credit Agreement), N, O, P, Q and R to
              the Credit Agreement to remain true); and

                      (c) the  Parade  Sale,  the SCOA  Sale and the  MassMutual
              Consent  Letter do not require  any consent or waiver  (other than
              the waivers contemplated by Section 2 hereof) under any agreement,
              instrument or other  document  (including  without  limitation the
              Convertible  Subordinated  Notes and the Subordinated  Convertible
              Debentures).

     The foregoing shall be deemed to be representations and warranties made in 
an


<PAGE>



    operative Document for purposes of section 11.01(d) of the Credit Agreement:

              4.      Covenants.

                      (a) Simultaneously with receipt thereof, Baker shall cause
              to be paid to the Banks an amount equal to the Net Proceeds of the
              SCOA Sale for application to the Borrower's  Obligations under the
              Credit  Agreement,  and  the  Aggregate  Commitment  Amount  shall
              automatically and permanently be reduced by an amount equal to the
              greater  of  (x)  the  Net  Proceeds  of the  SCOA  Sale  and  (y)
              $40,000,000,   provided,  however,  that  such  reduction  in  the
              Aggregate  Commitment Amount under the Credit Agreement (the "SCOA
              Reduction")  shall be in addition to (and not in satisfaction  of)
              any  required  reductions  in  the  Aggregate   Commitment  Amount
              pursuant  to the  terms of the  Credit  Agreement  (including  the
              Parade Reduction (as defined below)); and

                      (b) Simultaneously with receipt thereof, Baker shall cause
              to be paid to the Banks an amount equal to the Net Proceeds of the
              Parade Sale for  application to the Borrower's  Obligations  under
              the Credit  Agreement,  and the Aggregate  Commitment Amount shall
              automatically and permanently be reduced by an amount equal to the
              greater  of (x)  the  Net  Proceeds  of the  Parade  Sale  and (y)
              $20,000,000,   provided,  however,  that  such  reduction  in  the
              Aggregate  Commitment  Amount  under  the  Credit  Agreement  (the
              "Parade   Reduction")   shall  be  in  addition  to  (and  not  in
              satisfaction   of)  any  required   reductions  in  the  Aggregate
              Commitment  Amount  pursuant to the terms of the Credit  Agreement
              (including the SCOA Reduction).

     A breach of any of the foregoing covenants shall be an Event of Default for
     all purposes of the Credit Agreement.

              5. Effective Date.  This Agreement  shall become  effective on the
     date (the  "Effective  Date") as of which  the Agent  notifies  each of the
     parties  hereto  in  writing  that it shall  have  received  the  following
     documents, each of which shall be satisfactory to it in form and substance:

                      (a)      copies of this Agreement duly executed and 
              delivered by each of the Borrower, Guarantors and Majority Banks;
              and

                      (b)      such other documents relating to the matters 
              contemplated hereby as the Agent or its counsel may reasonably 
              request.

              6.      Miscellaneous. Except as expressly herein provided, the 
     Credit Agreement and all other operative Documents and Financing Agreements
     shall remain unchanged and in full force and effect.  This Agreement may be
     executed in any number of counterparts, all of which taken together shall 
     constitute one and the same instrument and any of the parties hereto may 
     execute this Agreement by signing any such counterpart.  This Agreement 
     shall be governed by, and construed in


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     accordance with, the law of the Commonwealth of Massachusetts.


              IN WITNESS WHEREOF,  the parties hereto have caused this Agreement
     to be duly  executed  and  delivered  as of the day and  year  first  above
     written.
                                       JBI, INC.


                                       By     /s/Philip Rosenberg
                                            Name:      Philip Rosenberg
                                            Title:     Executive Vice President


                                       J. BAKER, INC.


                                       By     /s/Philip Rosenberg
                                             Name:      Philip Rosenberg
                                             Title:     Executive Vice President

                                       FLEET NATIONAL BANK,
                                       for itself and as Agent


                                       By     /s/Gerald G. Sheehan
                                             Name:      Gerald G. Sheehan
                                             Title:     Asst. Vice President


                                       THE FIRST NATIONAL BANK OF BOSTON


                                       By     /s/Thomas F. Farley, Jr.
                                             Name:      Thomas F. Farley, Jr.
                                             Title:     Director


                                       FLEET BANK, N.A. (formerly "NatWest Bank
                                             N.A.")


                                       By     /s/Gerald G. Sheehan
                                             Name:      Gerald G. Sheehan
                                             Title:     Asst. Vice President




<PAGE>




                                       BANK HAPOALIM B.M.


                                       By     /s/Conrad Wagner
                                             Name:      Conrad Wagner
                                             Title:     First Vice President

                                       By     /s/Laura A. Raffa
                                             Name:      Laura Anne Raffa
                                             Title:     First Vice President and
                                                        Corporate Manager


                                       NATIONAL CITY BANK OF COLUMBUS


                                       By     /s/Michael J. Durbin
                                             Name:      Michael J. Durbin
                                             Title:     Corporate Loan Officer


                                       STANDARD CHARTERED BANK


                                       By     /s/David D. Cutting
                                             Name:      David D. Cutting
                                             Title:     Senior Vice President


                                       By     /s/Leonardo A. Tee
                                             Name:      Leonardo A. Tee
                                             Title:     Vice President


                                       CITIZENS BANK OF MASSACHUSETTS


                                       By     /s/Patrick C. Joyce
                                             Name:      Patrick C. Joyce
                                             Title:     Vice President








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                                       THE YASUDA TRUST AND BANKING COMPANY,
                                       LTD.


                                       By     /s/Makoto Tagawa
                                             Name:      Makoto Tagawa
                                             Title:     Deputy General Manager


We hereby acknowledge, consent and agree to the terms of the foregoing Agreement
and confirm that our  obligations  under the Guarantee and the Pledge  Agreement
shall remain unchanged and in full force and effect.

Dated:  February 27, 1997

SPENCER COMPANIES, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President

SPENCER NO. 301 CORP.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President

JBI HOLDING CO., INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


TCMB&T, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President





<PAGE>




WGS CORP.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President

TCM HOLDING COMPANY, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


MORSE SHOE, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President

BUCKMIN, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


ELM EQUIPMENT CORP.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


JARED CORPORATION


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President




<PAGE>


MORSE SHOE (CANADA) LTD.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President

MORSE SHOE INTERNATIONAL, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


ISAB, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President


WHITE CAP FOOTWEAR, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President



THE CASUAL MALE, INC.


By   /s/ Philip Rosenberg
     Name:          Philip Rosenberg
     Title:         Executive Vice President