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                                                                   Exhibit 10.7

                              EMPLOYMENT AGREEMENT
                              --------------------

     This Employment Agreement is made as of September 1, 2000, between Newport
News, Inc., a Delaware corporation ("Newport News") and George D. Ittner, of
Darien, Connecticut ("Ittner").

     Newport News and Ittner hereby agree as follows:

1. EMPLOYMENT
-------------

     Newport News agrees to continue to employ Ittner in the greater New York
     City metropolitan area until the effective date of the termination of
     the employment period, as hereinafter provided, and Ittner agrees to
     continue such employment. Ittner will serve faithfully and to the best of
     his ability as President and Chief Executive Officer (CEO) of Newport News,
     reporting to the Board of Directors of Newport News or its designee. Ittner
     will have managerial responsibility for Newport News and its assigned
     activities. Notwithstanding anything herein to the contrary, there are
     certain transactions, a list of which has been provided to Ittner, that
     require the approval of the Board of Directors of Newport News. For
     purposes of this contract, anywhere herein where a designee of the Board of
     Directors is permissible, Newport News hereby so designates the Office of
     the President of Spiegel, Inc.

2. BEST EFFORTS
---------------

     During the employment period, Ittner will devote his best efforts and all
     his business time and attention to the business of Newport News and
     will faithfully perform his duties subject to the direction of the Board of
     Directors or its designee and generally subject to the employment policies
     of Newport News as may be promulgated from time to time.

3. TERM OF EMPLOYMENT
---------------------

     The term of this Employment Agreement shall be a period of three (3) years
     (Initial Term) commencing September 1, 2000, and terminating December
     31,2003, subject, however, to prior termination as in after provided
     Section 8 (Termination for Cause) below. This Employment Agreement shall be
     automatically renewed and continue in full force and effect for additional
     one year terms without limitation, unless either party gives the other
     party six (6) months' written notice of its or his election to terminate
     this Employment Agreement at the end of the then current calendar year. If
     Newport News elects to terminate this Employment Agreement in accordance
     with this Paragraph 3, then Newport News will pay Ittner at time of
     termination an amount equal to Itter's entire compensation and benefit
     package (including pro-rated Annual and Long Term Incentives) then in
     effect as provided on Schedule A and Schedule B and Paragraph 6 herein
     calculated for a period of twenty-four (24) months unless termination is
     after Ittner's 62nd birthday.

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4. COMPENSATION
---------------

     Newport News shall pay Ittner an annual base salary in accordance with
     Schedule A payable in the manner as is done in the ordinary course of
     business for upper level executives of Newport News. The Board of
     Directors or its designee shall review this base salary annually and shall
     have the right to increase it at any time during the employment period. An
     increase in base salary shall be evidenced by the Board of Directors or its
     designee approving an amended Schedule A to this Employment Agreement,
     which shall give the amount of the increase in base salary, the new total
     base salary and the period for which the increase shall be effective.

5. BONUS
--------

     Ittner shall be entitled to an annual cash bonus no later than February
     28th of each year based upon the performance of Newport News for the most
     recently ended calendar year. The bonus will be in accordance with Schedule
     A. The bonus opportunity shall be determined based upon performance
     criteria mutually and reasonably developed by Newport News or its designee
     and Ittner and agreed to by the Board of Directors with the understanding
     that such criteria will provide a fair and professionally challenging
     achievement rewarding good performance. The predetermined performance
     criteria, and any changes mutually agreed upon by Newport News or its
     designee and Ittner and agreed to by the Board of Directors, shall be as
     set forth on Schedule B, attached to this Agreement.

6. BENEFITS
-----------

     Ittner shall be eligible for all medical and dental benefits, disability
     benefits, long term incentive plans, stock options, profit sharing, savings
     plans, automobile allowance, paid vacation, paid-up split dollar and whole
     life insurance policies then in effect, a membership at a country club and
     other benefits which are or shall be adopted by Newport News covering its
     senior executive management staff, provided he meets the qualification
     requirements for such benefits. Additional benefits may be added during the
     term of this Agreement by Newport News.

7. DISABILITY OF ITTNER
-----------------------

     If, during the term of this Employment Agreement, Ittner shall become
     disabled by accident, illness, or otherwise, and such disability shall
     continue for a period of six (6) successive months following which he is
     unable to resume his duties hereunder, Newport News shall have the right to
     terminate the employment period by giving written notice to Ittner of its
     intention to do so at least thirty (30) days prior to the effective date
     of such termination, provided however, Newport News agrees to pay a lump
     sum at the time of termination in an amount equal to the fair value of his
     entire compensation and benefits package in place at that time calculated
     for a period of six (6) months commencing from the effective date of such
     termination in lieu of continuing to provide such benefits in periodic
     amounts. Any dispute as to whether such a disability has

                                      2

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     occurred shall be resolved by a physician reasonably satisfactory to both
     parties, whose determination shall be final and binding on both parties.

8. TERMINATION FOR CAUSE
------------------------

     Newport News may terminate the employment period for cause for the
     following reasons other than innocent acts: repetitive and offensive public
     intoxication, a felony conviction, the intentional perpetration of a
     dishonest act or fraud against Newport News or an affiliate or subsidiary
     thereof, which is significantly injurious in a material respect to the
     financial condition, business or reputation of Newport News or any of its
     affiliates or subsidiaries. Newport News shall have the right to terminate
     the employment period for any above reason by giving written notice to
     Ittner of its intention to do so and specifying therein the reason and the
     effective date of termination. In this case a severance payment will be
     paid in accordance with Paragraph 3 above, and this Agreement will have no
     further effect.

9. OTHER EMPLOYMENT
-------------------

     Ittner covenants and agrees that during the employment period, he will not
     directly or indirectly (except with the written consent of Newport News)
     become engaged in, be employed by, render services to or for, or permit his
     name to be used in connection with any business other than the business of
     Newport News and its subsidiaries and affiliates, whether such other
     business is or is not competitive with that business. After termination of
     this Agreement, Ittner agrees that for a period of one year he will not
     solicit for engagement or as an employee any person who has been employed
     by the Company within the preceding twelve months as a senior level
     executive.

10. TRADE SECRETS
-----------------

     Ittner shall not at any time while this Employment Agreement is in force,
     and for a period of two (2) years after its termination, unless authorized
     by Newport News, divulge or disclose to any person or corporation any
     confidential or proprietary information relating to the business of Newport
     News or its subsidiaries and affiliates including, but not in limitation,
     customer list, supplier lists, prices of products, services or operational
     processes. A breach of this confidentiality clause will result in no
     compensation and benefits being paid at the time of termination.

11. TOTAL AGREEMENT
-------------------

     This contract contains the complete agreement concerning the employment
     arrangement between the parties and, as of the effective date of this
     agreement, supersedes all other agreements, whether oral or in writing,
     between the parties. This agreement may be modified or added to only if
     evidenced in writing signed by the party to be liable.

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12. GENERAL
-----------

     The headings of all the sections are inserted for convenience of reference
     only and will not affect the construction or interpretation of this
     agreement.

13. GOVERNING LAW
-----------------

     This agreement shall be governed by the laws of the State of New York
     without regard to principles of conflicts of laws.

IN WITNESS WHEREOF, the parties have executed this Agreement as of SEPTEMBER 20,
                                                                   -------------
2000
----

NEWPORT NEWS, INC.

By: /s/ Michael R. Moran                                 /s/ George D. Ittner
    ------------------------------                       -----------------------
    Michael R. Moran, Director                           George D. Ittner

OTTO VERSAND GmbH

By: /s/ Martin Zaepfel
    --------------------------
    Martin Zaepfel, Deputy Chairman

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                              EMPLOYMENT AGREEMENT

                                  SCHEDULE A
                                  ----------

Annual compensation for 2000 will be Four Hundred Fifty Thousand Dollars
($450,000.00).

Bonus opportunity for each year of this contract shall be 75% of base salary.

Dated:        September 1, 2000

/s/                                                      /s/ George D. Ittner
------------------------------                           -----------------------
Newport News, Inc. Director                              George D. Ittner

                                      5

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                             EMPLOYMENT AGREEMENT

                                  SCHEDULE B
                                  ----------

This Schedule B is made part of the Employment Agreement between Newport News
and George Ittner dated September 1,2000.

Bonus is determined by the Executive Committee and the Board of Directors each
year. Historically the criteria has been a pre-tax profit range stating the
amount of pre-tax profit that Spiegel has to reach.

For the year 2000, the pre-tax profit range is as follows:

                   50% of Bonus Opportunity at an EBT of $12.0 million
                  100% of Bonus Opportunity at an EBT of $18.0 million
                  150% of Bonus Opportunity at an EBT of $24.0 million

Dated: September 1, 2000

/s/                                                      /s/ George D. Ittner
------------------------------                           -----------------------
Newport News, Inc. Director                              George D. Ittner

                                      6

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                             EMPLOYMENT AGREEMENT

                                 SCHEDULE B
                                 ----------

This Schedule B is made part of the Employment Agreement between Newport News
and George lttner dated September 1,2000.

Bonus is determined by the Executive Committee and the Board of Directors each
year. Historically the criteria has been a pre-tax profit range stating the
amount of pre-tax profit that Spiegel has to reach.

For the year 2001, the pre-tax profit range is as follows:

                   50% of Bonus Opportunity at an EBT of $14.1 million
                  100% of Bonus Opportunity at an EBT of $20.2 million
                  150% of Bonus Opportunity at an EBT of $26.2 million

Dated: January 1, 2001

/s/                                                      /s/ George D. Ittner
------------------------------                           -----------------------
Newport News, Inc. Director                              George D. Ittner

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                                 SCHEDULE A
                                 ----------

Annual compensation effective March 1, 2001 will be Four Hundred Seventy
Thousand Dollars ($470,000.00).

Dated:    January 1, 2001

/s/                                                      /s/ George D. Ittner
------------------------------                           -----------------------
Newport News, Inc. Director                              George D. Ittner